The IPO is part of the disinvestment programme to garner a whopping Rs 1.05 lakh crore in FY20, up from Rs 85,000 crore in FY19 and Rs 1 lakh crore in FY18.
The Centre will sell 12.5% stake in the state-owned Mazagon Dock Shipbuilders (MDL) via initial public offer (IPO) soon to raise about Rs 700 crore, sources told FE. The disinvestment receipts would be higher from the shipbuilder if its employees subscribe to 5% of post-IPO equity capital of the company, reserved for them.
MDL, the country’s premier defence shipyard, achieved a value of production of Rs 4,399 crore in FY18 and earned a profit before tax of Rs 696 crore. As on June 2018, its order book for shipbuilding and submarines were Rs 51,442 crore. Currently, eight warships and five submarines are under construction at MDL. The IPO is part of the disinvestment programme to garner a whopping Rs 1.05 lakh crore in FY20, up from Rs 85,000 crore in FY19 and Rs 1 lakh crore in FY18.
The department of investment and public asset management (Dipam) held multiple roadshows for the MDL IPO in the last week of August and in the first week of September in Mumbai.
The Centre is also in the process of listing a group of other firms including IRCTC, RailTel, FCI Aravali Gypsum and Minerals, WAPCOS and Telecommunications Consultants India (TCIL).
Even though most of the unlisted PSUs are smaller in size and receipts from their IPOs won’t be humongous, yet these are important for unlocking true value in these firms. Listing of five PSUs –Midhani, Rites, Ircon, GRSE and MSTC — fetched only Rs 1,915-crore disinvestment revenue to the Centre in FY19.