Shares of the state-run Shipping Corporation of India (SCI) soared 12% to Rs 128.9 per share in intraday trade on the BSE on Thursday. The stock closed 9.7% at Rs 126.2 as the government approved the demerger of the company’s core and non-core assets.

In a bourse filing, SCI said the Ministry of Corporate Affairs (MCA) had approved a demerger plan of non-core assets of Shipping Corporation of India Limited into Shipping Corporation of India Land and Assets Limited.

The government has identified SCI as a strategic divestment. On November 10, 2021, SCI established a wholly-owned subsidiary, Shipping Corporation of India Land and Assets (SCILAL), as part of a demerger under SCI’s strategic divestment process to divest non-core assets of the company.

The board has approved the demerger plan of directors of SCI, DIPAM, MoPSW, SCILAL and the stock exchange. The demerger plan has been submitted to the Ministry of Corporate Affairs (MCA) for approval.

SCI, NMDC Steel Ltd, BEML, HLL Lifecare, Container Corporation of India, RINL or Vizag Steel and IDBI Bank are the entities the centre is looking to divest to raise Rs 65,000 crore by FY24. The government has set a divestment target of Rs 51,000 crore for the next fiscal year. The FY24 target is on par with the revised FY23 remedial budget of Rs 50,000 crore.