Shreeji Shipping Global IPO: The good and the bad

Summary: Thinking of applying for the Shreeji Shipping Global IPO? The shipping and logistics player has delivered consistent profitability with strong return ratios. However, weak revenues and other risks warrant closer scrutiny. Find them in the story below.

Shreeji Shipping Global IPO, raising Rs 411 crore via a fresh issue, will open for subscription on August 19, 2025 and close on August 21, 2025. We bring you a quick breakdown of the shipping and logistics company’s business, its past track record and key strengths and weaknesses to help you make an informed investing decision.

What the company does

Shreeji Shipping Global is an integrated shipping and logistics company specialising in handling dry bulk cargo (coal, grain, cement and ores) at ports and jetties in India and Sri Lanka.

The company operates a fleet of over 80 vessels, including barges, mini bulk carriers, tugboats and floating cranes, along with over 370 cargo-handling and earthmoving machines. Its network covers major ports like Kandla and others along India’s west coast like Navlakhi, Magdalla, Bhavnagar, Bedi and Dharmatar, plus Sri Lanka’s Puttalam Port. In FY25, it handled 15.71 million metric tonnes (mmts) of cargo.

By bundling end-to-end logistics solutions from loading to delivery under one roof, Shreeji removes the need for multiple service providers. Its customers span oil and gas, energy, FMCG, coal and metals industries.

Past track record and valuation

Shreeji Shipping Global’s performance over the past three years shows steady operating profitability but a declining revenue trend due to demand slowdown for cargo services on routes, like the Middle East to India, where it operates. Between FY23 and FY25, revenue declined 14 per cent annually while net profit rose 9 per cent per annum, supported by improving margins.

The company’s return ratios are robust, with an average ROE of 44 per cent and ROCE of 37 per cent over the last three years, reflecting efficient capital use. The balance sheet remains moderate on leverage, with a debt-to-equity ratio of 0.7 as of FY25.

At the upper end of the price band of Rs 252, the company is valued at a P/E of 29 times and P/B of 5.4 times. For comparison, listed peers trade at a median P/E of 8 times and average P/B of 1 times.

The good

Efficient cargo handling and reliable on-time delivery are key positives, which have helped it earn the loyalty of long-standing clients. Eight of its top 10 customers have stayed with it for over five years. The company has steadily expanded its base, serving 106 customers in FY25 compared with 96 two years earlier. Moreover, over 92 per cent of income each year has come from repeat clients. 

The industry backdrop adds further tailwinds. Cargo volumes at Indian ports are projected to grow at 11 per cent annually, nearly doubling by 2030. With entrenched relationships and the ability to handle large-scale cargo seamlessly, Shreeji is well positioned to ride this wave of rising trade flows.

The bad

Yet, there are risks investors should take into consideration. Shipping and logistics are a fiercely contested space, with regional players undercutting on price and service. This makes it hard for any single operator, even one with scale, to capture and hold market share. More troubling is Shreeji’s dependence on a handful of big-ticket clients: in FY25, the top 10 contributed 64 per cent of revenue, with the largest alone making up for 20 per cent. Such concentration is a double-edged sword. The very clients that ensure stability can also expose the company to sudden shocks if relationships sour or orders decline.

The revenue mix further magnifies the risk. Over half of Shreeji’s business is tied to cyclical industries such as coal, oil and gas, and power, sectors that move in lockstep with policy decisions and commodity price swings. When demand falters, volumes can dry up quickly. Add to this the capital-intensive nature of the business, where ships, cranes and manpower lock in high fixed costs and the margins that look generous in good times can turn fragile when cargo flows ebb.

Where will the IPO money go?

Of the Rs 411 crore being raised through the fresh issue, around Rs 251 crore will be used to acquire dry bulk carriers. An additional Rs 23 crore will go towards repaying certain outstanding borrowings. The remainder will be allocated for general corporate purposes.

So, should you subscribe to the Shreeji Shipping Global IPO?

The dry bulk shipping industry offers steady demand potential and Shreeji Shipping’s profitability and strong return ratios are positives. But IPOs come with scant operating history in the public markets and little clarity on how a company will perform once listed. 

It's wiser to observe how a stock behaves post-listing and assess it with a few quarters of performance behind it.

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