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Mazagon Dock Shipbuilders IPO to Launch Next Week, Govt Likely to Dilute Stake in Company

Image for representation. (Reuters)

Image for representation. (Reuters)

An earlier issue to raise Rs 700-800 crore was deferred due to low demand for shipbuilding stock.

Mazagon Dock Shipbuilders, India’s only naval defence company, is set to launch its Initial Public Offering (IPO). The issue will open on September 29 and close on October 1, 2020. The government is likely to dilute its 10-15 per cent stake in the company to raise Rs 400-550 crore through its maiden public offer.

An earlier issue to raise Rs 700-800 crore was deferred due to low demand for shipbuilding stock.

The state-owned defence company, aptly called “Ship Builder to the Nation,” is the leading public sector undertaking under the Ministry of Defence (MoD). It was conferred with the ‘Mini-Ratna’ status in 2006. The company builds, repairs destroyers and conventional submarines for the Navy and undertakes other vessels for commercial clients.

The Mazagaon Dock Shipbuilders reported a revenue of Rs 5,566, while its profit stood at Rs 415 crore for the financial year 2020. Currently, the Mumbai based shipyard has an order worth Rs 52,000 crores for building four P-15B destroyers, four P-17A class stealth frigates and a couple of Scorpene class submarines for the Indian Navy.

The shipyard’s announcement makes it the eleventh initial public offering and the first government firm to launch an IPO in this calendar year. A slew of public offers by companies such as SBI Card, Rossari Biotech, Mindspace Business Parks REIT, Happiest Minds Technologies and Route Mobile, join the list at the stock market.

At the same time, Compute Age Management Services and Chemcon Speciality Chemicals' public issues close today while Angel Broking’s issue will be closed on Thursday, September 24.

Likhitha Infrastructure and UTI AMC are scheduled to open their respective IPOs next week on Tuesday, September 29. Yes Securities (India), Axis Capital, Edelweiss Financial Services, IDFC Securities and JM Financial are the book running lead managers to the issue.


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