The government will offer up to 5 per cent of its equity in Cochin Shipyard, the Finance Ministry announced on Tuesday. Going by the floor price, government can get more than ₹2,000 crore. The government has fixed the floor price of ₹1,540. The indicative price for the non-retail category will be released separately.
“Offer for sale in Cochin Shipyard Limited (CSL) opens tomorrow for non-retail investors. Retail investors and Employees of CSL can bid on Thursday, October 17. Government will divest 2.5 per cent equity with an additional 2.5 per cent as green shoe option,” Secretary in the Department of Investment and Public Asset Management (DIPAM0, Tuhin K Pandey said in a social media post.
Shares of Cochin Shipyard ended the day higher by 3 per cent at ₹1,673 on October 15, and on YTD basis, the shares were up by 145 per cent, having corrected from mid-July all-time highs of close to ₹3,000. The company has a market capitalisation of close to ₹44,000 crore. The company posted a 77 percent jump in net profit at ₹174.2 crore in the April-June quarter of current fiscal compared to ₹98.6 crore in the corresponding period of the previous financial year. The company has a order book of ₹22,500 crore as of September, with an order pipeline for shipbuilding projects worth ₹7,820 crore.
Cochin Shipyard was incorporated in 1972 as a Government of India company, with the first phase of facilities coming online in 1982. The company has Miniratna status. The yard has facilities to build vessels up to 1.1 million tonnes and repair vessels up to 1.25 million tonnes, the largest such facility in India. In August 2012, the Government of India announced plans of divestment to raise capital of ₹15 billion (15,000 million Rupees) for further expansion through an Initial Public Offering (IPO) towards the end of the fiscal year.
The company commenced the shipbuilding operations in 1978, ship repair in 1981, marine engineering Training in 1993 and offshore upgradation in 1999. Its recent success in securing export orders has been achieved through consistent improvement in productivity and also aggressive marketing undertaken in the last few years.