Great Eastern Shipping Company Ltd (NSE: GESHIP) Q4 2025 Earnings Call dated May. 12, 2025
Corporate Participants:
G. Shivakumar — Chief Financial Officer
Anjali Kumar — Head of Finance and Corporate Communications
Rahul Sheth — Executive Director
Analysts:
Pritesh Chheda — Analyst
Mohammed Farooq — Analyst
Unidentified Participant
Prolin Nandu — Analyst
Vikram Suryavanshi — Analyst
Rajesh Khattar — Individual Investor
Himanshu Upadhyay — Analyst
Srikar Sai — Individual Investor
Gaurav Jha — Individual Investor
Presentation:
Operator
Good evening, ladies and gentlemen. Thank you for standing by. Welcome to GE Shipping Earnings Call on Declaration of its financial results for the quarter ended March 31, 2025.
At this moment, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.
I now hand over the conference to Mr Jee Shiva Kumar, Executive Director and CFO at the Great Eastern Shipping Company Limited to start the proceedings. Thank you, and over to you, sir.
G. Shivakumar — Chief Financial Officer
Thank you. Good afternoon, everyone, and welcome to the conference call to discuss the results for Q4 FY ’25 and also to discuss the market as we are seeing it. We’ll go through a presentation as always, and after that, we’ll be happy to take questions from you. I have with me Rahul Sheth who will be also answering your questions. First disclaimer, we are not forecasting the markets necessarily we’re just giving our views on how we think it may play-out. There are a lot of uncertainties involved in the shipping business and you should always keep that in mind. Our Q4 FY ’25 highlights, we had a drop-in profit versus the previous year and we’ll come to the main reasons for that. Our consolidated net asset value is at just over INR1,400 per share. This is around the same level that we were at the same time last year, that is in March 2024 and we’ll come to that as well.
We’ve declared the 13th consecutive quarterly dividend and this time it’s for INR540 per share. You’ve seen the results, I’m sure and you’ve had time to absorb them. Let me just take you through to the normalized financials. We had — one highlight we had was that we had an impairment on three of our MR product tankers that we bought in the last 18 months as part of our switching strategy where we sold our older vessels and replaced them with the same type of vessel, but more modern ships. This is because we did not want to lose capacity, but we also did not want to put in a lot of capital in the market, which we felt was where the prices were too high.
However, the markets — the asset prices have gone down in the last six months or so, we applied our standard impairment test to the vessels that we bought. Out-of-the four MRs that we bought, three of them had some impairment and we have taken that impairment into our accounts just short of INR70 crores. The other thing that affected the results and you can see a big drop from Q4 FY ’24 to Q4 FY ’25 on both standalone and consolidated basis was the drop-in tanker earnings. You may recall that the Q4 of the previous FY was when we just started having the Red Sea problem where the Houthis were attacking ships that were passing by the Babel Mandeb and therefore, ships were getting routed around Africa when they had to go from east to west or west to east. And that resulted in a significant tightening of the market and therefore very good tanker earnings in Jan to March 2024.
That effect has now played out some time ago and markets were quite weak. In fact, this is — we were expecting a reasonable recovery during the winter months of ’24, ’25, that did not happen. And therefore, we had significantly lower earnings than the same-period last year. And that, of course, the impact has filtered through from the standalone results to the consolidated results. So we have about a INR400 crore drop from Q4 to Q4 last year to Q4 this year. Coming to — and these are just our standard ratios and I mentioned this already, you can see what’s happened to crude tankers, we dropped from Q4 FY ’24 to Q4 FY ’25. We dropped by about $22,000 a day. Product tankers also we drop by almost about a third from 37,000 to 24,700. LPG carriers, all four of ours are on-time charters and those pricings have gone up and therefore our rates have gone up from 35.5 to 43,000. Our dry-bulk also dropped marginally.
Again, the big impact has obviously come from the tankers. Coming to the net asset value, this is a standalone net asset value. Our ship prices, the fleet values dropped between 15% and 20% year-on-year. And that’s a negative that you see INR176 a share, while — which has got compensated by the cash profit that has been earned and we’ve always said this that even when you have a drop-in the value of the ships, a significant part of it in a strong market is made-up by the cash profits. So that’s what has happened in the last financial year. We have, of course also paid out a dividend of INR35 during this period. So we have a small drop from INR1127 to 1150 this is the standalone movement in the standalone net asset value over the last five years, that’s from March ’20 to March ’25, where we’ve gone up to 0.5x. This does not take into account the dividend, which has been paid over this period, which is in excess of INR100 a share. Again, on a consolidated basis, it’s a similar picture to what we saw on standalone except that here the cash profit is a little bit more and the fleet value drop is not that sick, is not much more than it was on a standalone basis.
Coming to what’s been happening in the shipping market, we’ve seen — you can see the — on the left-side, you can see the Suezmax earnings graph. Focus on the table at the bottom where you can see that FY ’24 market earnings were about $51,600 and these are not our ship earnings. This is a market benchmark earning, which has come down to about $44,000 a day, the Aframaxes saw an even more dramatic fall also crude tankers saw an even more dramatic fall. MR tankers also moved down by about 20% from just short of $30,000 a day-to about $23,400 per day. A large part of this comes from a slow-growth in-demand, unwinding of previous inefficiencies like the Red Seak like the Red Sea impact, which I mentioned for Q4 of last financial year. Our global crude oil demand in Q4 grew by about 1%. The Chinese crude oil imports also grew slightly. They have been building stocks as far as we can see. We had some new sanctions from OFAC, that’s a US sanctions authority, which tightened the crude tanker capacity. So that’s one factor which we might see playing out. Every week or two, we are getting a few more ships getting sanctioned — being added to the sanctions list.
The fleet growth has been zero year-on-year for the crew tanker fleet. We’ve been saying this for some time that there are very few new ships being added currently on the crew tanker fleet. Our product tanker fleet saw growth of about 2% during the year. Tanker asset prices during the quarter dropped by about 5%, but over a longer period of time from a year-ago period, you could see crude product tankers dropping by about 20% and we’ll see that graph and crude tankers by a little less. Order book continues to be reasonably low, especially for crude tankers, dry-bulk earnings for tape sizes were about the same as they were in the previous financial year, while for Supramaxes they were slightly better than in the previous financial year. So we’ve — the quarter, of course was much worse than the same quarter in the previous year. Iron-ore trade has been weak in the first-quarter. Again, this is seasonal disruption that one sees in Australia and Brazil. Coal trade has dropped significantly. The two large importers, which is Brazil — which is China and India, both of these economies are producing more coal domestically and leading to lower import demand.
Global grain trade has also dropped off during the quarter. Some of it is lower soybean production imports or purchases from — by China from the US, again pending what happens with the tariffs. Also, we’ve had lower wheat production from the Black Sea Black Sea region and correspondingly lower demand from China. There is all — there are also reports that Chinese grain production has been growing or at least grew last year and therefore — therefore, import demand has been a little lower. The bulk area fleet grew by about 3%, sorry, and bauxite trade has been very strong. It’s been one of the few bright spots for the last few years, consistently strong growth in bauxite imports into — into China, especially from Guinea. The order book continues to be at very low levels around 10%. LPG, our ships, of course, are on-time charters, so it doesn’t matter much, but we’ve seen a huge drop-in up in spot rate from 85,000 in FY ’24 to below $40,000 a day-in FY ’25. This is because of a reversal.
The previous year we had the Panama Canal water levels being very low, which meant that the number of transits through the Panama Canal was restricted, which meant a longer ton miles for gas carriers carrying LPG from the US Gulf to Far East. That has got reversed now and therefore that impact has got removed from the market. The order book stays pretty solid and we’ll come to that in a moment coming to fleet supply, you have an order book of about 29% for LPG ships and you have 21% for product tankers, while around 11% for crude tankers and. The good news for even crude is that it’s a little more rear-ended, especially so in LPG. So you can see that 29% order book really delivers in 2026 and 2027. So you can see that big green pillar there of 13.9% that’s delivering in 2027. So it’s not an immediate concern. But in-product anchors, we see significant deliveries this year and the next couple of years, so 5%, 7% and 7%. Coming to scrapping, obviously, when the market is this strong, there’s very little scrapping going on and so it continues to be very, very low.
And we keep looking at this. There is still a lot of potential for scrapping, which will mainly kick-in only when the markets — when markets are very weak. At these levels, there is no incentive really to scrap ships. Looking at asset price movements, you can see the top right-hand corner, which is the price movement in an MR tanker and you can see that it’s dropped by about 20% from the peak, which was maybe six to nine months ago. Even for crude tankers, we’ve had some downward movement pressure in prices, but not as much for the product tankers. And for LPG and for dry-bulk prices continue to be reasonably firm. In dry-bulk, the cape size values have been very firm. For the smaller ships, that’s for the and, prices have been — have dropped a little bit more than for Capes.
Coming to the offshore business and utilization has been — while it’s not gone down, the market — the mood in the market is not very positive with all the Saudi Aramco actions which have been happening and there is talk of even more renegotiations or cancellations this is the fleet supply data which hasn’t changed much we have a very old fleet internationally but it’s not really changed much because the issue here is more on the demand-side. Coming to our repricing, we have two rigs which are — which have already come off their previous contracts. Both of them have obtained short-term contracts in India. Both of these contracts will commence and these contracts are between four and seven months. Both of these contracts will commence only after the monsoon period on the West Coast of India. So we are talking of commencement in October, November of this year. And one of them will finish within H2 FY is scheduled to finish within H2 FY ’26, the other one within H1 FY ’27. There are options as well, but that’s up to — that depends on what happens with the drilling campaign that we are part of.
If required, then it can be extended. We have another rig coming off-contract sometime around December this year. We have bid into a three-year contract in India and we have been awarded that contract as well. So she will come off the contract in December and do the usual work between two contracts and go back onto a three-year contract with — hopefully within Q4 of FY ’26. Then after that, the next repricing is required only in H2 FY ’27. On the vessels front, we only have four vessels that need to be fixed during this five vessels that need to be fixed during this financial year. These are our two M-class vessels and our two include our two M-class vessels and our two 150-ton anchor handlers, which are the most capable and widely marketable of our vessels, which are typically running on short-term contracts internationally and we are okay to run them on those short-term contracts. So otherwise 80% of our vessel capacity for FY ’26 has already been locked-in at profitable rates.
Coming to financials, this is yet another slide that we show. We are still net cash on a standalone basis. So the results of all the capex that we did and the levering up that we did, we are waiting — awaiting opportunities to buy while prices have dropped. They have not yet reached our comfort levels and we will wait for that to happen. On a consolidated NAV, you can see that we are still trading at a significant discount. We also invite you to go to our website and look at all of these projects and partners that we support on our CS — on the CSR front, we are very proud of this. Also, we have if anybody is interested in 75-year — now year history. You can look up our coffee table book on our website, which gives you a significant amount of our history.
Thank you. That brings me to the end of this presentation. We are now happy to take questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may click on Raise hand icon tab available on your screen. You may also post your text questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles we’ll take our first question from Pritesh Chheda from Lucky Investments. Please go-ahead.
Pritesh Chheda
Sir, can you hear me?
G. Shivakumar
Yes.
Pritesh Chheda
Yeah. Sir, can you go to your slide on the rigs because when you are giving out your comments yeah it was not audible here.
G. Shivakumar
Okay one moment sorry for that no problem yeah we cannot see the rig slide.
Pritesh Chheda
Yeah one moment one moment yeah you want to just slide after so what I understand here is that you have a repricing lined-up for three rigs or let’s say, one-rig in the second-half of this year. That’s it.
G. Shivakumar
So okay, let me just put it slightly different.
Pritesh Chheda
Can you just tell us how many rigs? How many rigs are deployed today? Yes. Okay. How many are idle for you and what is the repricing?
G. Shivakumar
Yeah. So we have a total of four rigs, one of them — so two of them continue to be on their long-term contracts currently, okay. Two of them have come off their previous long-term contracts. We — of these two, one is idling, both of them technically are idly. One of them is receiving a small standby rate while idling.
Pritesh Chheda
Okay. One is receiving a small standby contract small rate or a small tenure, what is it receiving?
G. Shivakumar
No, no. Through this period, we receive a minor rate, which I mean a very low-rate which compensates for basic expenses so technically you can just take it as a as not. It just meet some costs.
Pritesh Chheda
So basically two rigs are deployed on long-term, another rig got deployed at a lower rate right away and one-rig is idle, right?
G. Shivakumar
Yes. But yeah. Sorry, just let me clarify. So we own four rigs. One-rig is fully employed for the full financial year. The second rig is employed for the greater part of the financial year. She will come off sometime in the month of January, February and she has already won one a new contract ONGC. The other two rigs, those two rigs are on shorter contracts, they will begin their contract in the month of November. But because they are short-term contracts, generally when we price those contracts, we price in the fact that there is some idleness until the contract begins. So in one of those contracts, one of these two contracts, which are short-term, right, there is a — there is a standby rate during the monsoon period, which is what she was referring to, the other one does not have that. But when we price the contracts with the charter, we eventually factor-in for the fact that the contracts are starting with a bit of delay. Yes. Month of October, November.
Pritesh Chheda
Okay, yeah I am more confused than what you started to answer.
G. Shivakumar
Just take it that two are idling currently. Both of these rigs will probably go on — they have received contracts, which will start only after the monsoons are over. So they should go on hire between October and November this year. And these contracts are short-term contracts between four and seven months. One of them will get over in Q4 FY ’26. One of them is scheduled to get over if there are no further extensions in Q1 FY ’27.
Pritesh Chheda
See now this is very simple. Another question here is in a recent round of ONGC tender why do we see a significant change in the rates.
G. Shivakumar
So market participants take a view on what — this is a tender process, right? So — and so the number that you put in is important in deciding on whether you are successful in landing employment for your rig or not. And market participants take that into account and their keenness on landing a contract is goes into the pricing which is put into the tank. And sometimes it reflects a view of the market and the risk as well.
Pritesh Chheda
So this is that contract, which is a Six-Month or shorter-duration contract?
G. Shivakumar
No, no. The — as you’re referring, the short-term contracts are with other players.
Pritesh Chheda
Okay. So this recent win that you have, what is the duration of that contract?
G. Shivakumar
The ONGC tenders are three-year contracts.
Pritesh Chheda
Okay. Okay. So basically…
Operator
I’m sorry to interrupt. May I request you to join back the queue please as we have other participants waiting for their turn.
Anjali Kumar
It’s okay. Let him clarify first.
Operator
Okay, please go-ahead.
Pritesh Chheda
I’m here to clarify. I’m actually stuck on the first question. This is my only question. So just to recap, you will have another two rigs post this, which will come for repricing, which is H2 half of this year and H1 of next. So in next one and a half year two rigs for repricing are to be done over the — for the longer-term years. Correct?
G. Shivakumar
That’s three rigs, Pritesh. Three rigs. Okay. Sorry, H2 in the next two years, sorry, I included H2 FY ’27. If you don’t include that, it’s in the next 1.5 years, yeah.
Pritesh Chheda
Okay. Thank you very much, sir.
Operator
Thank you. We’ll take our next question from Mohammed Farok from Pearl Capital. Please go-ahead can you please unmute your microphone and go-ahead with your question, please?
Mohammed Farooq
Hello. Can you hear me now? Yes, we can hear you. Please go-ahead. Thank you. Thank you. Good afternoon. Thank you for the opportunity. With the recent imposition of US tariff on Chinese goods, there is growing uncertainty in global trade flows, particularly in commodity movement and supply-chain realignment. Could you elaborate on how these development might impact GE shipping tankers and dry-bulk segment, either in terms of trade patterns, fleet deployment or charter rates.
G. Shivakumar
So you may have seen the recent announcement which has happened today is declaring the lowering of these tariffs. Of course, it’s for a 90-day period and we don’t know whether those rates will again change in the future. And as the tariffs rates change, the way trading patterns in general will get affected and which commodities get covered in these tariffs will change. But just to have a very broad view, because you mentioned crude, you mentioned oil and dry-bulk. So what we have seen is two things you have to keep in mind. You have to keep in mind the tariff rates between the two countries on the commodity in question. So oil has been largely exempted from this tariff. China imposed a tariff previously on imports from a crude exports from US to China. But the amount of trade that happens between these two countries on crude is very minimal and that’s why China could very easily find alternate buyers for that crude and US would find alternate I mean China would be able to buy from other countries and US would also find alternate places to sell that. So there is close to minimal to zero impact on crude.
On product trade, there is barely any product trade, if any. So that did not get affected by the tariffs. On dry-bulk also, the volume between the two countries is very minimal. The major commodity that gets affected is soybean. We had seen that in the — in Trump’s first-term and basically what happened was to just oversimplify, US’s exports of soybean to China basically went more to Europe and Brazil, Argentina, which sends a certain amount to Europe, sent it to China. So you had a realignment of the trade. And basically the two countries were able to more or less evade the imposition of these tariffs. Now, of course, today we just saw the announcement before the meeting that the tariff rates have changed. And so this impact may not be there. Have I answered your question or was there a second part to it?
Mohammed Farooq
Yeah. And the main part is that GE shipping impact won’t be huge, yeah. With these tariffs in this case?
G. Shivakumar
Yeah. No, not at all, because I give you an implication of the general market and shipping is one of many shipping companies that — yeah.
Mohammed Farooq
Fine. Sir, and second one is we understand the operating margin in shipping industry can be highly volatile, moving sharply in either direction depending on the market condition. Based on the past experience, what measures does GE shipping have in-place to protect or maximize operating profit margin in the event of an unfavorable market environment.
G. Shivakumar
So see what you said was right that markets are very volatile. On the revenue front, the only thing you can really do is to take a time-charter cover. We don’t actively pursue a strategy whereby we decide that we must protect the top-line by fixing out a certain number of ships. If we believe that there is a — it’s a favorable decision to take a time-charter cover, which means fixing out a ship for a year or two or three, we may take those decisions. However, because the market can be very volatile, we do ensure that the balance sheet is strong enough to weather a market where the rates are low. And we have underinvested in this space over the last few years. So if the market does come off and the asset values do come off, we are fully prepared to invest more into this business to renew the fleet and expand the fleet.
Mohammed Farooq
Yeah, okay. And last question, sir. And Shipping has consistently demonstrated strong margins, maintained a robust cash position and brings over 70 years of operational track-record. However, the stock continues to trade at a significant discount over 40% to its net asset value and at a valuation well below peers. While we appreciate the management is focusing on operating performance rather than the share price, could you share your perspective on why investor confidence remains muted despite these fundamentals? And are there any steps the company is considering to help narrow this valuation gap.
G. Shivakumar
So as a company, we do our best by explaining the business either on the investor call or through our investor meetings. Eventually it is up to the market to decide the valuation it gives any company. The stock market is full of companies which are either overly priced or underpriced. That’s how our market works. Eventually, it’s up to-market participants to decide whether fair valuation that they believe the company should be valued at.
Mohammed Farooq
I understand that, but you know shipping is one of the lowest in the market. Is there any reason for that?
G. Shivakumar
How are you product? I think you’ll have to ask your fellow investors that you can take that. We are not experts on that area, unfortunately.
Mohammed Farooq
Okay, okay. Thank you. Thank you, sir.
Operator
Thank you. We’ll take one text question from Jeet Gala from Centra Insights LLP. Order book for dry-bulk and product tankers are now more than the aging fleet. Does it mean that if scrapping — scrapping does not happen in the next one or one to 1.5 years, supply-side tightening thesis for these two segments will be over because order books are catching-up fast for deliveries post CAL 2026.
Rahul Sheth
Yeah, so you have to also keep in mind the demand-side because you can see how that also pans out.
G. Shivakumar
Yeah. And the other thing to keep in mind here is that your — the order books catching-up fast for deliveries, actually the ordering — the pace of ordering has slowed down in the last three to four months, at least for dry-bulk. So that’s been a very low number for the first four months of calendar ’25. What also happens is that you have, you know you have building and deliveries of ships happening in clusters. So the next five years, we’ll see a lot of bulk areas turning 20 years-old because we had a big building boom in bulk areas between 2006 and 2020. So all of those will happen. But finally, it comes on as Rahul mentioned to the demand-side. You still do need demand, supply can only help you a little bit. You still need demand to be fairly positive in order to enable markets to be strong.
Rahul Sheth
And if you see on one of the slides that we have provided that the balance between the order book and the average age of the fleet, right, which is old, it’s still skewed. I think can just pull-up that slide.
G. Shivakumar
Yeah, this is what you have mentioned.
Rahul Sheth
Yeah. You can still see that it — we have — we can always share that picture also. We’ve seen it over different time periods over the last 20, 25 years. We still are at a position where the order book as a percentage of fleet and the age of the fleet is still skewed, which means that this is one of the oldest fleets we have seen in the last 20, 25 years and the order book while rising is not still at the highest we have seen. So the two ends are not fully matching, especially on the tanker side.
G. Shivakumar
Yes, right? Yeah. This is the historically high order book. Yeah. So you can see how high the order book has been in the past. But one more thing I’d just like to clarify here, the product tanker order book includes what are called LR2, long-range two tankers, which technically can trade both crude oil and refined products. So they are the largest product tanker and the smallest crude tanker. If you find that the crude tanker market is stronger, a lot of these ships could easily move over to the crude tanker side and therefore, they can switch between these between the products and crude sectors.
Operator
Thank you. We’ll take the next question from Shivam Mittal from Care PMS. Please go-ahead.
Unidentified Participant
Hello. Yes, we can hear you. Please go-ahead. Yeah. Thank you so much for operating the opportunity. So my first question is regarding the regulations like IMO 2030 and 2050. So any update on that part, how that will impact the industry dynamics in terms of supply.
Rahul Sheth
So I think looking at 2030 2050 is too far-out. A lot of the rules have also not been crystallized. There is one of the new fuel or emission rules which are coming up in 2028, but they still need to be ratified at the IMO. So until that happens, we prefer not to speculate on that.
Unidentified Participant
Okay. So how it will impact in terms of some supply shipping?
Rahul Sheth
So again, let’s just see exactly how the rule gets crystallized. But the broad idea is that there will be certain costs for emissions. If eventually it just depends again on supply-and-demand, right? So if, for example, if — just to oversimplify it, let’s say there is a very highly polluting ship, right, the cost of that ship will be more than a ship which is polluting less carbon dioxide. And if the market is very weak and the costs of the high polluting ship are prohibitively high, enough so that the person is not generating sufficient EBITDA to keep that ship and the ship is very old, then the person may end-up scrapping that ship. But to speculate on something that will come up few years from now, I think is too far down the line. We even need to see whether the rules change and in what fashion the rules come, then we’ll be in a better position to exactly know what happens.
Unidentified Participant
Okay. So the second question is any — so in terms of aging of rigs and vessels in industry. So any idea on that aspect?
Rahul Sheth
Sorry, could you just clarify that question?
Unidentified Participant
So what will be the overall aging in terms of rigs and vessel in industry — overall industry level?
G. Shivakumar
So it is a pretty old fleet and that’s there. But the thing is, yeah, we have that. So you have the percentage of the fleet, which is more than rig fleet, which is more than 30 years-old is one-third of the fleet. Yeah. So it’s a very old fleet in any case. But these rigs are continuing to work. So this thesis has not really worked out.
Rahul Sheth
Yeah, the rig fleet has been old. We have seen this data point for the past 10, 15, 20 years. And the rig fleet has been old and as long as charters are willing to take those rigs in, then they will find the market.
Unidentified Participant
All right. Thank you so much.
Operator
Thank you. We’ll take our next question from Prolin Nandu from Edelweiss Public Alternatives. Please go-ahead.
Prolin Nandu
Yeah. Hi, team, am I audible? Yes. Please go-ahead. Yeah. Thank you so much for giving me this opportunity. So Shim, my — if you my question is on crude and product carriers, right? If I look at your age of fleet is somewhere close to, 15 16 odd years, right? Yeah. And one, I mean the heuristic that one uses is that after 20 years, there is a significant decline in debt rates, right, in some sense. Now what I’m saying is that in the past, you have mentioned that the peaks and asset prices have probably spanned 3.5 years, four years, right? That’s the cycle that one has observed in the past. Now that has not played out in the last five odd years and there have been multiple disruption in trade routes or changing in trade routes, which in a way have only aided the, let’s say, a longer supply or longer trade routes, right, in some sense.
So where I’m coming from is that how do we make this age of this fleet much more younger, right, in some sense in an environment where the asset prices are not seeing the kind of decline where we’ll probably go-ahead and buy the vessels. So is there any structural change in the industry in terms of number of years of peak and tough in asset prices and does that structural change lead us to change our strategy of how we look at asset prices? And once we acquire the asset, what is the — I mean, we prefer to put it on a, you know not on the long-term contract, but not a shorter-term contract, right, in some sense. So any change in our strategy based on how the — the shipping cycle has been playing out in the last five years.
G. Shivakumar
Yeah. So good question and a lot of things to unpack there. So let’s look at it here. So your main thing was, what-if I — if I get it correctly, what-if you don’t get the prices that you’re looking for? Is there some kind of paradigm shift, which prevents your getting the prices that you’re looking for. There are ships from dropping in price. I assume something like that is what you were asking.
Prolin Nandu
Correct.
G. Shivakumar
Okay. So one is, let’s take that thing. What you said is correct. Beyond a certain age, ships are not able to trade as freely tankers especially are not able to trade as freely as when they are younger and therefore, the earnings could suffer under some markets. So that’s one. It’s correct. Yes, we would like to have a younger fleet. We would like to have more ships in our fleet. The — what we have done over the last 18 months or so is that we have the ships which were getting overage and which we could not trade-in the international market and which we could not deploy elsewhere. We opted to sell them and replace them with ships which are a little younger and therefore improving the age profile of our fleet and improving the number of ships that we could trade internationally. However, ship prices were very-high and therefore, we did not want to commit too much capital towards capex at the time.
So we restricted ourselves to only doing those switches just to maintain our capacity in the market. So coming to the next question, which is, is there a paradigm shift in asset prices? Are they at a permanently high plateau, so to speak. And those are a bad — that’s a bad phrase because I think that’s a phrase which was used in 1928, ’29 in the US for stock prices. But it is possible that they are at significantly higher prices than they’ve been in the past. Our preference is to wait for the — to get the prices. There is a lot of uncertainty with regard to the demand-side, the global economy, especially with all this tariff stuff, which might get sorted-out even — it might be getting sorted-out even as we speak. There is a significant amount of uncertainty. We still believe that we will get the opportunities to buy the ships that we need to buy for meeting our targets for replacement and growth. If we don’t, then that is a risk for us, but we will wait-and-see whether we get those ships. So we don’t know whether there is a paradigm change in the way people think about pricing of ships, but we would rather wait to acquire ships at the prices that are comfortable for us.
Rahul Sheth
And you mentioned that at some point, we shared that the average cycle time is three years, but that’s an average. It’s not like we have not seen cycle times being longer. One that you may remember or maybe aware of is during the period, where you saw cycle times of five, six years depending on which sector it is. And even if you go back and if you do some analysis during that period of time, asset values have gone even higher, rates were even higher. And when you look-back then and you say that, okay, you know, was advised to have bought at those prices? It wasn’t. It was — it was much wiser to have waited patiently for the appropriate time to have invested. And so it’s — yes, having very long cycles in shipping is not very common, but we have seen it and we have studied it. And so therefore, we are able to at least from history, take a few lessons and be able to prepare for that.
Prolin Nandu
No, great. Thank you. Thank you so much for that. Just one follow-up on the same aspect, right? So you mentioned that in 18 months, you have changed the age, right, but I’m looking at a presentation of October ’23, which is right there in front of me. And in every aspect, right, in terms of fleet profile, right, every aspect — I mean all — for all your four products, the ages have on an average went up, right, from 14.9 to 15.3. So see the larger question is that are we probably willing to cut-down the capacity, right, cut-down the number of fleet that we have, 38 right now in our — on our books, right, because they are aging first and then when we get an opportunity, we will buy. So is it fair that we are — I mean, we are open to downsize post our scale of operation before we get an opportunity, is that — is that a — is that a fair way to probably think about it?
Rahul Sheth
So just two things to keep in mind is, one is that had we not done any of these switches, what would have been the age, which would have been older than the number you mentioned. So we have arrested some of that aging. Secondly, the number of ships we own today are 38, but we have two in charter. So effectively the capacity is 40. And from October, I don’t have that number in front of me, but I think you should be seeing a number of 42 ships at that point in time. So from 42 to 40, we’ve dropped, which is two mainly on dry-bulk, but on tankers, we have remained the same. Now while we — you know, whether it’s 40, 41 42, I think that’s at a very marginal level where we are drawing a line. The idea is not to really drop much capacity from here. Although there will be a gap because on our call on the market, you will sometimes maybe sell first, then buy first, then sell, which means that in the last one or two ships, the exact numbers may not match. But broadly the idea is not to drop significantly from here.
Prolin Nandu
Great team. That’s it from my side. Thanks a lot for these answers.
Operator
Thank you. We’ll take a text question from Surendra Yadav, an individual Investor. Referring to the notes to consolidated financials for FY ’25, 0.7 sub Point B, CDSCR, the remarks mentions.
G. Shivakumar
Yeah. Yeah. So the question is on whether where the point on DSCR includes in — sales includes effect of prepayment of borrowings and wanting to know details of the prepayment done because there was a stock exchange filing informing that the NCD prepayment was canceled. Yes, the NCD prepayment was canceled. The prepayments were with regard to a loan that we had taken from a bank and we prepaid the loan and that’s the prepayment, which is mentioned in this — in this point. We can move to the next question.
Operator
Next question is from Kiritan Mehta from Baroda BNP Paribas Mutual Fund. On crude tanker, what has resulted in drop-in rates this quarter, while ARB trade between West and East has grown and several tankers have been sanctioned.
G. Shivakumar
Yeah. So the drop is again because of the base. The Q4 of FY ’24, as I mentioned, was very strong because we had the Red Sea disruption and ships having to take the long route. And that set a very-high base from which we have dropped. So we are still at reasonably strong levels. We are at — I think our crude tankers averaged 30K plus. But we also have the pressure of a low-ish oil demand growth not just for — and why we look at Q4 versus Q4, there is some growth, but in general, oil demand growth has been weak. And that’s why we’ve had a general drop-off in tanker earnings between FY ’25 and FY ’24.
Rahul Sheth
And we have also think that the demand in China has been a bit weak, which you know because the two points you’ve raised are relevant that the West-East trade is there and tankers have been sanctioned. But we have seen some weakness in-demand from the refineries in China. We’ve seen some weakness in the demand in refineries in Europe as well. There is a very major refinery that has even opened up in West Africa, which used to import a lot of cargo, but they’ve been consuming a bit of domestic crude. So it did add a bit of weakness in this quarter. The second point also on the sanctioning of the tankers.
Yes, initially in the month of January when a lot of sanctions did come in, it did affect the market. Now, of course, as you can imagine, this data is not absolutely clear. But from what you can kind of gather, it shows that the sanction ships were initially had some impact. It seems that the crew is still moving because not really been much deliveries of new tankers. So it has given some support because you’ve seen in the month of April and May, the crude market coming or becoming strong over the last few months. However, it seems that the sanctioned tankers some way or the other, the oil is able to move. So it’s not like those ships have completely gone out-of-the market.
Operator
Thank you. We’ll take a live question from Vikram Suryavanshi from PhillipCapital India Private Limited. Please go-ahead. Vikram, can you please unmute your microphone and go-ahead with your question, please?
Vikram Suryavanshi
Am I audible now?
Operator
Yes. Please go-ahead.
Vikram Suryavanshi
Okay. Thank you, sir. Sir, you said the two ships are on in-charter. Which are the categories of the ships? And second is that since now we have limited or reduced the plate, the in-chartering would be like a structural decision to add some of the capacity or is it like these are taken just to complete few of the voices?
G. Shivakumar
No, so one is an MR tanker, one is a tanker, so that’s one-product and one accrued but it’s not — it’s not like a structural decision. It just depends on the pricing. So whenever, say, for example, if you sold a ship and you are looking to get some more capacity, at some point, you may weigh the option between whether it is beneficial to buy a ship or in charter a ship. So when you’re in chartering a ship, let’s say for an example, let’s say if you’re charging a ship for five years or you’re buying a 15-year-old tanker, which has five years of life left, effectively, you’re getting five years of exposure to the market. So then it’s — so then it just depends on relative pricing where the company and decides is the best place to take the deal.
Vikram Suryavanshi
Okay. So what would be the duration of these contracts?
G. Shivakumar
One was originally about five years, so that has about 3.5 years to go. That’s for the MR tanker. The crew tanker has about two years to go.
Vikram Suryavanshi
Understood. And in any calculation, what would be the gross value in million dollar for our offshore assets.
G. Shivakumar
Yeah, that should be between $500 million and $600 million, $550 million and $600 odd million dollars. Yeah. Yeah. 500 to 600 lakhs.
Vikram Suryavanshi
And okay. And would it be possible to share what approximately share would be for rigs?
G. Shivakumar
Rigs will probably be about 60% plus of the value 60% to 70% share.
Vikram Suryavanshi
Okay. I think that was it from my side. Thank you very much, sir.
G. Shivakumar
Yeah.
Operator
Thank you. We’ll take our next question from Rajesh, an Individual Investor. Please go-ahead.
Rajesh Khattar
Hello, am I audible?
Operator
Yes. Please go-ahead.
Rajesh Khattar
Yeah, hi, good afternoon. I wanted to understand which are your most common routes, source and distinction points? So basically in terms — in case of any geopolitical developments, when will you get positively impacted and when you can get negatively impacted? I just wanted to get a sense of that. Which are your most common routes.
Rahul Sheth
Yeah. I think that’s — so basically, you should not look at it like that. You should look at the shipping market as one big market because eventually what happens is ships move around and markets rebalance. So let’s say, for example, if one of the routes because of tariffs or sanctions or whatever or demand collapse or whatever it may be, let’s say it comes down, right? The ships will get redeployed on the other routes. So eventually the balancing happens fairly quickly. And so you should look at-the-market at large rather than focusing on specific routes. And shipping companies generally are not dependent on one route or another route that they — it’s at-the-market at large.
G. Shivakumar
Just to give you an example here, three years ago this Russia-Ukraine conflict started. And because of that, that disruption happened. Even though we were not participating in the trade of Russian exports to India or China, the market goes up because of the impact of that trade and we get the benefit of that, even if we are not participants in that particular route. And that’s why it doesn’t matter what our routes are and we can’t even tell you what our routes are because we don’t know what voyage we’ll do next. So we don’t have any standard routes that we apply. We are not like a liner service where we have a schedule that we would like to do. We go where we believe the rates will be best.
Rajesh Khattar
But historically like in which country you have seen the maximum source or destination origin. I mean, it would have been constant — I mean, it would have been more or less constant, right, for example, China?
Rahul Sheth
They can vary quite a bit. But like if you want to just take a general like an idea, firstly, our roots will keep changing. But like if you’re like in the dry bulb trade, right, large part of the drywall trade, something like 30%, 40% of the cargoes go to China. So depending on where they are loaded and that’s a variety of countries like Brazil is very big, Australia is very big, again, for different kind of commodities. But China is very large. Or if you’re talking about the oil trade, the Middle-East, as you can imagine is a very big exporter of oil and products. And US is also a very big exporter of crude. So like that, you’ve got certain countries which are very large and effectively at some point or the other, you will have to trade-in those markets. But we know shipping companies that do the oil trade and they very limited go to Middle-East because they are mainly in the Western area. But like Shiv mentioned, eventually you don’t need to do a particular trade because the market at large will change based on how tight the market is.
G. Shivakumar
And rates will tend to equalize in different zones.
Rahul Sheth
Yes.
Rajesh Khattar
Okay. So when you were responding about asset prices to a previous question, you mentioned that you are reasonably confident of acquiring assets for your growth targets. So what exactly are your growth targets? Can you articulate them?
G. Shivakumar
So eventually is depending on the price levels you get-in the different asset classes. So depending on when you get the price levels that we are happy with, right? The idea is to eventually deploy all the capital into the business. It just depends on which asset comes down to the price levels we are happy with and when. And then it depends on what kind of assets you get-in the secondhand market.
Rajesh Khattar
No, I understand that because that has been the same stand you have been carrying for last many calls. But I just thought the word growth target, which is something which I have not before.
G. Shivakumar
So if your — your question is how many ships do you want to be? We don’t have a number specifically for that. We wish to grow, we wish to deploy our capital as much as we can into the business. So that is our target really. So if we can grow the fleet to 50% higher than it is today, deploying all our capital, we will be happy to do so. But it’s a question of having as much capital as possible employed into ships at good prices. Because ship prices depending on what you buy, they can vary from $10 million, $15 million to $50 million, $60 million. So that’s why the number of units that you have in-the-water can vary widely depending on which asset class we end-up buying.
Rajesh Khattar
But have you pondered that?
Operator
I request you to join back the queue, please as we have other participants waiting for their turn.
Rajesh Khattar
Yeah, I can. I mean just on this point, I’m not asking any question, just so have you pointed that whatever savings you have made in waiting for lower asset prices and you have been waiting for more than three years now. So have you not given up equivalent or more profits by selling your assets quite early in the cycle and by being very low in your assets for the last three or four years?
G. Shivakumar
See, if you look at the last — if you look at the last probably 18 months, right. Any asset that we would have bought would have probably been between a zero-negative return if you had bought incremental assets. So you’ve actually been much better-off waiting on the sidelines than investing it.
Rajesh Khattar
Even considering the earnings that we have — that we would have generated.
G. Shivakumar
Yes. If you have seen in the NAV calculation for this year, you’ve seen that you have generated a lot of cash, but you’ve also had a correction in asset values.
Rahul Sheth
So it is a zero return, which is broadly even is at a macro-level, but then you can kind of boil it down to individual asset classes as well. So your point is? Yeah. Your point is valid that if you had bought three years ago, with hindsight, if you had bought three years ago, we would have been better-off. With the same hindsight, buying one year-ago was not a — would not have been a great decision. So it’s tough, tricky to know when you — where you are in the cycle at any point in time.
Rajesh Khattar
Okay, fine. I’ll come back-in the queue.
Operator
Thank you. We’ll take our next question from Himanshu from Buggle Rock PMS. Please go-ahead.
Himanshu Upadhyay
Yeah. Hello. Yeah. First question was on MR tanker side where on the three tankers, we have taken a write-off at it. Now what would be the amount of write-off in percentage terms on the overall fleet and with after this write-off means the ships would be now at the current market prices. How are you looking at the segment now? Because from whatever we have purchased, there has been a significant rise or let’s say, 10% to 12% type of write-off. Is now the market more interesting or it still remains far off from what we were buying — what — from where we decided to have a replacement of the older vessels.
G. Shivakumar
Yeah. First, just to clarify, you wanted the impairment amount as a proportion of the total of these three ships or proportion of the total is less than 10%. First, it’s less than 10% of the original cost, okay. So that’s one. The second is, it is not necessarily written-down to-market value. It is written-down to the higher of market value or the value-in-use, which is basically the NPV of the future cash flows, where you do an assessment based on certain assumptions, etc. So it’s written-down to whichever is the higher of the two. So that’s on the impairment calculation. And then you had something on the values of today. What was that?
Himanshu Upadhyay
No. So my question was, we decided at those price points that we wanted to replace the older fleet, okay.
G. Shivakumar
That’s correct.
Himanshu Upadhyay
And with the 10% type of correction, let’s say, approximately okay. Is the market much more attractive and does the market sense to still to replace only or you would like to even go for expansion now after…
Rahul Sheth
One thing to just note is the market has risen a lot. So while the — and actually the correction from the peak is a little bit more than 10%. Depending on the asset class, it’s between 10% to 30% depending whether you look at dry-bulk or crew tankers or product tankers, but still the prices are still very-high from a historical context. The other thing also to keep in mind is that just to clarify on the impairment, right, is that we did sell a ship against this purchase. So what happens is when you sell a ship had we not sold that ship, that ship also would have come off in the price. So while the crew — while the ships that we bought have come off in price, you basically saved the money on the ship that you sold. So they somewhat balance out. But today, we still feel like the prices are relatively quite high.
Himanshu Upadhyay
But can we continue with the replacement strategy or you think is done for now what we were doing.
Rahul Sheth
No, I think we largely still would like to follow replacement strategy because like I mentioned earlier on the call, we don’t want to drop capacity substantially from here. The timing may vary a bit between when you sell first or buy and then so there could be a gap of for a few months, but broadly, we do not want to drop capacity.
G. Shivakumar
And just to clarify, replacement could come from long-term in charters as well.
Himanshu Upadhyay
Okay. And historically, the thought process was the level of assets cheapness or expensiveness will decide on the basis of what the historical average charter rates have been in last 10, 15 years. Are we still following a similar thought process or there has been some change in the thought process.
G. Shivakumar
Himanshu, no, it was not based on the average charter rates, it was based on how we see the asset prices in a historical context, just asset prices themselves in a historical context.
Himanshu Upadhyay
Okay. And in terms of the three segments, how are you looking at-the-market now? It’s a attractiveness or still you find all the three categories?
G. Shivakumar
Do you mean in terms of attractiveness for investment?
Himanshu Upadhyay
Yeah.
G. Shivakumar
In — on a long — on a historical context, dry-bulk is probably lower than the others. LPG is off the charts still in values and dry-bulk is a little lower than product tankers and crude tankers in historical terms.
Rahul Sheth
But asset values are still expensive basically across-the-board.
Himanshu Upadhyay
Okay. And one thing…I
Operator
Request you to join back the queue, please. Thank you. We’ll take a text question from Amit Khetan from Laburnum Capital. Our first question is, how much further would prices need to correct for us to be comfortable to take fresh capital allocation call between the various segments, where are we closest to pulling the trigger? And the second question is, the offshore earnings in Q4 were quite strong. How many rigs were operational in the quarter gone by.
Rahul Sheth
So firstly, we don’t give an exact number on when at the price level at which we will invest. But like Shiv just mentioned, the dry-bulk is at is historically cheaper than the tankers. So maybe it’s the closest to our purchase prices, although not there yet. And then offshore…
G. Shivakumar
Yes, so the rigs which were operational, so two rigs were fully operational during the quarter. One of them was operational for part of the time. Yeah, for sure. And the fourth one, we had a — we had a contract cancellation that we mentioned last-time for which we received a compensation in Q4 and therefore the earnings were reasonably strong. So in effect, we got income on even the vessels which had its contract canceled and that’s why the offshore earnings were quite strong.
Operator
Thank you. We’ll take the next text question from Surendra Yadav, an individual investor. Has the redemption of preferred shares issued by Grade Ship India to Jessco started? Understanding this would happen over four years starting this FY?
G. Shivakumar
Yes, it has started from this year. So we’ve already had that first installment last month.
Operator
Thank you. We’ll take our next live question from Shrikar Sai, an Individual investor. Please go-ahead., please unmute your microphone and go-ahead. Yes, please go-ahead.
Srikar Sai
Yeah. Thank you for the opportunity, sir. Sir, it’s regarding our offshore dripping rig contracts..
Operator
Srikar, I’m sorry, can you speak a bit louder, please? Your audio is not — it is very low.
Srikar Sai
Am I audible now?
G. Shivakumar
Yeah, a little bit.
Srikar Sai
Yes, sir. It’s regarding our offshore drilling contracts. So if we look at the day rates like one year back and now they have come down substantially, all the way from like $80,000, $80,000 $85,000 they are now hovering around $35,000 sir. So what has changed so much in this one year that the day rates have fallen so much sir?
G. Shivakumar
Yeah, the big factor which happened was the Saudi Aramco actions of about a year-ago where they canceled contracts. I think the latest count is for some 24 or 25 jackup rings, which obviously had a big impact on the availability. It had an impact on the market psyche as well. Till then the markets were in recovery mode and going at very profitable rates similar to those that you mentioned. So once that happened, then there has been obviously some concern about the direction of rates and therefore the keenness to get contracts has affected the day rates which are being earned by.
Srikar Sai
Sir, my second question is regarding like last three to four months, we have seen like India Energy week and also we have seen Indian government passing our like oilfield amendment builds amendment. So do we see any enthusiasm from the — or like the garment players like ONGC Oil India to drill more like in the coming future, like not now, but maybe like six months or one year down the line going back to the drawing board and trying to do the cessment data for whatever the fields they got in the OALP round nine and also round 10 has been launched recently. So are we seeing any enthusiasm from that side, sir?
G. Shivakumar
Yeah. So we will come to do all significantly later. We think there is enthusiasm. We have actually landed contracts for two players and this is not ONGC. There’s two short-term contracts which we’ve got for our two rigs, the and the Chaya are both for non-ONGC contracts. So hopefully, it means that the market is widening with more players coming in. Let’s see how.
Rahul Sheth
Okay — and just generally for your understanding, when they do these rounds of auctions for the blocks, a lot of these surveys get done, then they map out to know where to drill, how viable is it to drill and then based on that, they come up with the plan of how many rigs one would need to employ. Now that will all take a bit of time. So as of today, we will not know exactly how the demand picture will pick-up based on all these options of all these blocks.
Srikar Sai
Got it. Thank you, sir. That’s it from my side.
Operator
Thank you. We have a text question from Kirtan Mehta from Baroda BNP Paribas Mutual Fund. One more follow-up. How do you see crude supply changing over this year and consequent impact on crude tanker rate. Do we expect West to East trade grow as tariff discussion progress and we’ll see more ships getting sanctioned as well as gets locked-in shadow trade on Iran and Venezuela?
G. Shivakumar
Yeah. So crude supply, already OPEC has announced that they’re going to push up quotas by about 400,000 barrels a day-in June two months in a row, which means that’s 800,000 barrels a day more of supply coming into the market. Also, we are seeing Atlantic Basin supplies coming in US and Guyana and Brazil. Okay. So there is a significant amount of supply coming into the market, which is great for crude tankers is very positive for crude tankers because the more oil there is to carry, the more business there is for crude tankers. Rahul had mentioned earlier on this tariff discussion, there is not that much of trade between US and China on crude oil. However, the one thing that you could have is that US exports more crude oil to Asia, which might include India as well as part of a trade deal.
But again, this is all-in the realm of speculation. But in any case, the growth in-demand was coming from the East. The growth in supply ex-OPEC was coming from the Atlantic Basin and therefore, it was always likely that there would be a West to east trade growing. Coming to the final question, which is on more ships getting sanctioned and getting locked into the shadow fleet, yes, one of the effects you could have of these renewed OFAX sanctions and various yesterday UK also announced some sanctions on some ships. Yeah, is that those ships are unable to trade or at least unable to trade efficiently and therefore need to be replaced by other vessels, which are currently not the subject of sanctions and that could be a positive. So you could see more vessels going into those trades from the currently legitimate fleet, which is not sanctioned. So that’s a possibility and including in the Russian trade as well, not just Iran and Venezuela.
Operator
Thank you. We’ll take a live question from Prolin Nandu from Edelweis Public Alternatives. Please go-ahead.
Prolin Nandu
Yeah, hi. Thank you again for giving me this opportunity. My question again is on the capacity addition, right, that I previously discussed. Now traditionally, our view always has been to probably rent out more of our vessels on a spot market, right, because we want to capitalize on changes in geopolitical things or any supply disruptions. Now, again, from a point of — I mean, how much does our preference for spot market influence the price at which we want to buy any new ship, right? Hypothetically, in case if we decide that we want to probably change the strategy from spot to more of a contractual trade kind of an agreement going-forward, does it up the kind of value that we have in mind for any vessel to be added in our fleet? Is this the relation that I’m thinking about, is it valid? Is it how you guys also think about the — adding any new in your?
Rahul Sheth
So sir, our base position, like you said is to prefer the spot market versus the time-charter market. One thing you should know is the time-charter market generally you’re fixing for maybe a year, two, three years. The ship may have a life of 10, 15 years, right? So it’s not like you’re covering up all your days. Is and basically the simple answer is that the price level at which we buy the the ship and the decision to whether to remain on spot or time-charter are not linked. So it’s not like as if we follow time-charter market, we could up the price and start buying at a completely different level.
Prolin Nandu
Understood. Thank you so much. Sorry, sorry, go on. I’m sorry, please, please.
G. Shivakumar
Yeah. So what happens here typically is that you could put out a time-charter and say — and I think the point you’re making is that you can go to a higher price when buying because you are able to lay-off some of that risk by chartering out at a higher-level. Right. What tends to happen is that extrapolation of rates happen for much longer than the time-charter period. And so you’re paying much more — let’s say, you’re paying just as in a number, you may be paying a $10 million premium, but only recovering $5 million of that in the charter period. So you’re still open for the remaining part of the — of the excess that you have paid-for the ship. So that’s not something really that we do, which is to buy at a high-price and try to fix out. It’s something that you can do in a small way.
Prolin Nandu
Understood. Very clear. Thank you so much. Great.
Operator
Thank you. We’ll take our next question from Gaurav Jab, an Individual Investor. Please go-ahead. Gaurav, can you unmute your microphone?
Gaurav Jha
Yes. Am I audible?
G. Shivakumar
Yes.
Operator
Yes, but there’s lot of background noise.
Gaurav Jha
First, thanks for the opportunity. First, I would like to make a suggestion. Sir, can you please provide new account from coming quarters so we can analyse more.
G. Shivakumar
Sorry, I didn’t get your question. We lost you in-between. Could you please provide what?
Gaurav Jha
Sir, could you please add votes to account from the upcoming quarter.
Operator
Okay, I’m sorry…
Rahul Sheth
But it’s very unclear. We can’t question. Maybe you can put it in the text in the…
Gaurav Jha
Okay. Okay, sir. Okay. Thank you. Thank you, Gaura. You can post your text question on the Q&A tab. Yeah. Thank you. We’ll take a text question from Vinay, an individual investor. Can you please provide breakup of the cash-and-cash equivalents by instrument and currency?
G. Shivakumar
Yeah. So about little over 50%, about 55% of our cash is in US dollars. The rest is in rupees. US dollars are just in bank deposits. They just sit in our bank. The rupees are typically about a third of it is in bank deposits. The rest is in mutual funds.
Operator
Thank you. We’ll take a text question from Surendra. What’s the breakup of spot versus time-charter across four shipping segments, inclusive of in-chartering done via IFSC? Also please share the tentative breakeven rates for each segment.
G. Shivakumar
Yeah, we won’t — we don’t share breakeven numbers for each segment. So — but we can look at the spot versus time-charter. The one outlier in this is that our LPG carriers, we have four of them, all of them are on-time charter. The rest of the four — the other three sectors of shipping, just crude products and dry-bulk. Crude and products tend to be more — much more on the spot. So you would have typically 90% of the capacity in crude on spot, maybe 80% of the capacity in products on spot. And in dry-bulk, maybe it will be a little bit lower at maybe 60% to 70%. So that’s the breakup.
Operator
Thank you. We’ll take a live question from Rajesh, an Individual investor. Please go-ahead.
Rajesh Khattar
Yeah. Sir, just wanted to understand the valuation metrics in the shipping industry. I don’t want to talk about the stock prices, but — but theoretically, if you have to sell your company today, would you be happy if you get the NAV price? Price or if you have to acquire another shipping company, would you be okay to buy the target company at its NAV price? So how do you think about evaluation when you are making a deal of another company or of your own company?
G. Shivakumar
Yeah, we have never done a deal for a company so-far. We only know-how to buy and sell ships. So we’ve never looked at how companies are valued really. So it’s tough to say. As I said, we are not stock market experts, what little capabilities we have are in the shipping space of buying and selling ships. So we really don’t know-how valuation is done in the stock market.
Rajesh Khattar
It’s — so I’m not even talking about the stock market, but if a big investor comes and offers you the NAV of your company, would you take it?
G. Shivakumar
Which we haven’t thought about frankly.
Rajesh Khattar
Okay, okay. And what has been your company’s insurance policy? So in case of any adverse situation, will you have to take any hits in your P&L?
G. Shivakumar
No, our insurance covers us for various — so we have a few different types of insurance. One is machinery which covers the ships themselves and P&I is protection and indemnity, which is like a third-party insurance, including for the people. So these — between these, they cover pretty much most eventualities that can happen for a ship.
Rajesh Khattar
Okay. So you have some uncovered risk. I mean, when you say most…
G. Shivakumar
Typically deductibles, things like deductibles.
Rahul Sheth
Okay, okay. And I missed the opening commentary. So can you repeat whether the rigs getting fresh contracts are at higher rates or lower rates? I put it in the text question also, so you can just sense…
G. Shivakumar
The long-term contracts are at lower rates, that is the three-year contracts are at lower rates than the previous contract which are awarded maybe a year-ago. So the short-term contracts are about the same level as they were maybe a year-ago.
Rajesh Khattar
But yeah. Were you not positive about the rigs getting repriced at a higher-rate in your commentary a few quarters ago.
Anjali Kumar
If I may interrupt, you can have a look at the tech — the — when we put up the transcript on the website so that in the — so that we can save time for other questions.
G. Shivakumar
Yeah. So just…
Operator
This question already been answered, yeah.
G. Shivakumar
Yeah. So we just had this thing on a few quarters ago, the markets were looking positive till around this time last year till we had those significant cancellations by Saudi Arampur. So that’s the simple thing, which changed the nature of the market.
Operator
Okay, okay. Thank you. Thank you. We’ll read the text from Gauro Ja, an individual investor. Sir, firstly, thanks for the opportunity. I would like to make a suggestion regarding notes to accounts kindly add the same from next quarter results since it will corroborate us, inventory turn days are increased by 16 days, any specific reason? And third is in cash-flow, what is WTDL from bank and deposit in bank.
G. Shivakumar
So we — sorry, WTDL from banks, are we talking about working capital loans? We have no working capital lines. I don’t know what WTDL is. I assume it’s something to do with working capital lines. We don’t have any working capital lines. We only take long-term debt, or rather if we have working capital lines, it’s only for say currency or derivatives contracts. Inventory turn days is not a metric that we track at all. So I can’t comment on that. And notes to accounts. We have the notes which come always and in any case, we’ll have them in the annual report as well. We’ll see if it adds value and we’ll see if we can. But I have not fully understood that. Maybe we can take a look at that.
Operator
Thank you. We’ll take a text question from Surendra Yado, are the AHTSV capable of being deployed in other territories like North Sea where demand is much higher than supply currently?
Rahul Sheth
Firstly, I don’t think the demand is much higher than supply in the North Sea. The North Sea, what happens is you get shorter-term contracts. The market is very volatile there. So sometimes you may see that the rates are higher. But what happens is the utilizations are lower because the contracts are shorter-duration. So then you have to equalize it on 100% utilization for the year. So we do that calculation across different markets and our HTSCs are deployable not only in the North Sea, but in other markets as well.
G. Shivakumar
The typical North Sea HTSV is larger than ours, our 150 tonne. Typically the requirement there is at least 180 to 200. There is a market probably for the 150s, but the most common HTSVs in the North Sea are larger than ours.
Rahul Sheth
Yeah. But we have vessels which are deployed outside India as well. So we do look at other markets as well.
Operator
Thank you. We’ll take a live question from Shivam Shah from Impact Wealth Advisors. Please go-ahead Shivam, can you please unmute your microphone and go-ahead with your question please? Since there is no response, we’ll take the text question from Vinay. Is there cross usage potential of product tankers into crude tanker market and vice-versa? Product tanker order book is increasing faster than crude tanker order book. Also how to do propose to play this demand-supply dynamic?
Rahul Sheth
Yeah. So this is possible. So Shiv had earlier mentioned also on the call that the LR2 vessels which make a large part of the order book, basically they just coated Aframax tankers and Aframax tankers carry crude. So you can — you can basically take a product tanker and load crude and then the supply of the crude tankers increases. It can happen on the other side as well, but crude is a dirtier cargo than product. So you often entail some waiting time and cleaning costs of the tanks so that they are in a condition to carry products because the cleaning standards are higher. We have certain ships that can actually switch between the two segments.
Then depending on our views on the market, we have a time switched between the two. We have the ships that are capable of doing so. And basically what happens is that the market at large. So if say, for example, you see the product space are being significantly stronger than the crude tanker space. You will see many ships cleaning up and trying to carry products and vice-versa and then eventually markets do end-up somewhat balancing out.
Operator
Thank you. We’ll take a live question from Shivam Shah from Impact Wealth Advisors. Shivam, kindly unmute your microphone and go-ahead with your question, please.
Unidentified Participant
Am I audible? Ma’am?
Operator
Yes. Please go-ahead.
Unidentified Participant
So regarding the new asset acquisition, you mentioned that you are waiting for the correct price to come. So what are the fundamental reasons that are keeping the asset price this high and what are the reasons that will cause the price to correct?
G. Shivakumar
The earnings have been quite high and that is what is keeping prices high for now. So along with earnings being high, there are people who are wanting to buy also and that is keeping prices from dropping a lot. So that’s what is keeping prices high now. What can bring these down, there are typically two things that make — that stop hot markets or strong markets. One is demand not keeping up and the other is too much of supply of vessels. The order book is building up. It’s not a big amount, but it is building up, especially for LPG, maybe a little more for — maybe for product tankers as well. And that can cause some imbalance in demand-supply and therefore bring the markets down. If earnings come down, the next thing which happens is that, that also pulls down asset prices. So that is what we are waiting for. On the demand-side, you can have — you have significant uncertainty on economic growth happening. And if that continues, then you could have lower earnings and therefore lower asset prices, which will give us an opportunity to buy.
Unidentified Participant
Okay, just a follow-up question to this. Is there any target return on asset that you wish for before acquiring any particular ship?
G. Shivakumar
We would like to make at least a 10% IRR on the ships that we buy.
Unidentified Participant
Okay. Thanks. That’s all my questions.
Operator
Thank you. There is a text question from Rajesh. Why are you not following the spot policy for LPG carriers? How is the LPG market fundamentally different in this aspect?
Rahul Sheth
No, it’s not that it is fundamentally different, but basically, we took a call on the levels at which the repricings were at. And actually if you look at it, we priced all these contracts in the first-half of 2024. And they’ve done — if you — if you see how the spot market has actually behaved versus the contracts we fixed at, they’ve been substantially lower. So eventually, it just comes down to the pricing of the contracts that you get?
G. Shivakumar
You to the market call that you get.
Operator
Yeah. Thank you. We’ll take our last text question from Karan, an individual investor. What is the reason for so much fall in crude carrier and dry-bulk spot prices. Will it improve in near-future?
G. Shivakumar
We’ve — again, as Anjali had mentioned earlier, we have discussed this in our presentation and we’ve given the reasons for the drop-in rates. So if you could just go back through that through those then you will have the answers to the questions.
Operator
Thank you. As there are no further questions, I now hand over the call to Ms Anjali Kumar for closing comments. Over to you, ma’am.
G. Shivakumar
I have — yeah, okay. I just have — I can see a text question there, which has just come up. What’s the basis of assumption of ship revenue rate and NAV calculation? We don’t assume a revenue in the NAV calculation. The NAV calculation just replaces the book-value of the ship with the market value of the ship and that’s it. So we just take the — if we had to sell the entire fleet today, what is the amount that we can realize divided by the number of ships.
Operator
And sir, we have one more text question. It is from Surendra Yada. What has been company’s experience with Chinese carriers? Are the operational cost higher than similar ships from Korean or Japanese yards.
Rahul Sheth
So you should just know that now China has become like the largest builder in the world by substantial margin. In China, you’ve got very high-quality yards where the operational costs will not really differ but the lower-quality yards in China could have more operational cost than the Korean Japanese yards. And of course, our company, if we buy Chinese carriers, Chinese-built ships, they will tend to be always at the the best of the yards.
Operator
Thank you. This one text question from Rajesh Khatir. Have you lowered your IRR expectation to 10%? Earlier you used to mention 15%, if I’m not wrong?
G. Shivakumar
Yes, that’s correct. We have not lowered our expectations, but we realize that 15% is a very-high bar and therefore, we have kept this as a bad minimum that we would like to see at the end.
Operator
Thank you. There are no more text questions, sir or live questions.
G. Shivakumar
Yeah. Thank you.
Rahul Sheth
Thank you.
Anjali Kumar
Thank you everybody for joining in today and asking all your queries. In case any of you have any further questions or you feel your questions were not answered today, do feel free-to reach-out to us and we’ll be happy to help you with them. And the transcripts of this particular call will be uploaded very, very shortly. So thank you all again for joining.
Operator
Thank you, members of the management team. Ladies and gentlemen, on behalf of GE Shipping, you may now exit the meeting. Thank you for meeting — joining the call today. Thank you.