Shares of Cochin Shipyard advanced over 13% on Tuesday after the company bagged Rs 5,400 crore contract from Indian Navy. The company said that it has emerged as the lowest bidder (L1) for 16 X ASW SWC project of the Indian Navy. “The contract for eight vessels at a cost of about Rs 5,400 crore is expected to be concluded with the Ministry of Defence after due process. The order was bagged against a competitive tender issued by the Ministry of Defence in which both private and public sector yards had participated,” company said in an exchange filing today.
The stock of Cochin Shipyard rose as much as 13.44% to hit the all-time high of Rs 585.35 on BSE today. About 63 lakh shares of Cochin Shipyard exchanged hands on both BSE and NSE till the late afternoon trade. The stock had zoomed about 35% from its issue price. Earlier in August, Cochin Shipyard, India’s largest public sector shipbuilder, got a bumper response to its IPO with 76 times subscription. The shares of Cochin Shipyard got listed with a decent opening on the stock exchanges. Cochin Shipyard shares opened for trading today at Rs 461, a modest 6.7% premium to issue price of Rs 432, but soon zoomed to Rs 522, up 21%.
The company raised Rs 1,468.11 crore through the issue in which it sold total 33.97 million shares. The government divested 11.32 million shares through an offer for sale while the company issued 22.65 million fresh shares, that should ensure the government stake comes down to 75% post-issue.
Cochin Shipyard was incorporated in the year 1972 as a fully owned Government of India company and according to a CRISIL report, it is the largest public sector shipyard in India in terms of dock capacity, as of 31 March 2015. The company commenced ship repair operations in the year 1982 and has undertaken repairs of all types of ships including the up gradation of ships of oil exploration industry.