Cochin Shipyard Ltd (CSL), India’s largest largest public sector shipyard, is planning to raise about Rs 1,400-1,500 crore through an initial public offering (IPO) and has filed initial papers with the market regulator. On completion of a successful IPO, CSL will become the first of five state-owned shipbuilding companies to be publicly listed.
In November 2015, the Cabinet Committee on Economic Affairs has approved the share sale in CSL.
The company has filed the Draft Red Herring Prospectus (DRHP) with SEBI on Friday. The IPO comprises 33,984,000 equity shares consisting of a fresh issue of 22,656,000 equity shares and an offer for sale of 11,328,000 equity shares by the President of India, sources close to the development told BusinessLine.
CSL intends to use the net proceeds from the fresh issue for setting up of a new dry dock on its existing premises, setting up of an international ship repair facility at Cochin Port Trust area and for general corporate purposes. The equity shares will be of a face value of Rs 10, while the price band will be decided in consultation with the book running lead managers.
SBI Capital Markets, Edelweiss Financial Services, JM Financial Institutional Securities are the book running lead managers to the issue and Link Intime India is the registrar.
The net proceeds from the fresh issue will be used for setting up of a new dry dock on the company’s existing premises, setting up of an international ship repair facility at Cochin Port Trust area and for general corporate purposes. In addition to shipbuilding and ship repair, the company also offers marine engineering training.
As of March 31, 2015, CSL is the largest public sector shipyard in India in terms of dock capacity, according to a Crisil report. CSL caters to clients in Defence sector in India and also has commercial sector clients across the world.