The government is launching its first initial public offer (IPO) for financial year 2021 by selling stake in Mazagon Dock Shipbuilders Limited. The government will sell 15.17% state to raise ₹444 core. With a price band of ₹135– ₹145 a piece, the three-day share sale will be open for subscription during 29 September to 1 October.
“The objects of the offer are to carry out the disinvestment of 30,599,017 equity shares by the selling shareholder constituting 15.17% of our company’s pre-offer paid up equity share capital. Issue proceeds will go to the president of India, acting through the ministry of defence, Government of India (the selling shareholder),” said a company statement.
So far this year, government has raised ₹5,695.63 crore via offer for sale in Hindustan Aeronautics Ltd and Bharat Dynamics Ltd both of which are in defence sector. In the Union Budget, the government had set a divestment target of ₹2.1 lakh crore for FY21. Government will look to raise a major chunk of the divestment target through selling stake in Life Insurance Corporation in India. However, in the past government has not been able to meet the divestment target in eight out of the past 10 fiscals.
Yes Securities India Ltd, Axis Capital Ltd, Edelweiss Financial Service Ltd, DAM Capital Advisors Limited (formerly known as IDFC Securities Ltd) and JM Financial Ltd are the book running lead managers s to the Offer
The company is a defence public sector undertaking shipyard under the department of defence production, ministry of defence with a maximum shipbuilding and submarine capacity. It is actively engaged in construction and repair of warships and submarines for the ministry for use by the Indian Navy and other vessels for commercial clients. It is a wholly owned government company, conferred with the ‘Mini-ratna-I’ status in 2006. It is India’s only shipyard to have built destroyers and conventional submarines for the Indian Navy and also one of the initial shipyards to manufacture Corvettes.
