Cochin Shipyard Ltd’s Rs 1,468 crore IPO got fully subscribed in less than half an hour of opening of the day 2 bidding. The company fixed a price band of Rs 424-432 per equity share of Rs 10 face value for its IPO. The issue will constitute 25% of the post issue paid-up equity share capital. Cochin Shipyard will receive Rs 978.74 crore through the fresh issue of shares. The portion set aside for qualified institutional buyers (QIBs) was subscribed 72% and non-institutional investors 22%. Retail investors category was oversubscribed 1.57 times.
The company targets to raise Rs 1,440.92 crore at the lower end of price band and Rs 1,468.11 crore at the higher end of the price band by issue and sale of a total 33.97 million shares. Cochin Shipyard will receive Rs 978.74 crore through the fresh issue of shares. The government is divesting 11.32 million shares through an offer for sale while the company is issuing 22.65 million fresh shares, that should ensure the government stake comes down to 75% post-issue.
The proceeds of the offer for sale will be received by the selling shareholder – The Government of India. The company will not receive any proceeds from the offer for sale. Chairman of the public sector shipyard in India, Madhu S Nair said, the company will be investing Rs 3,100 crore over the next five years for capacity expansion in both ship building as well as on the repairs side.
Cochin Shipyard is constructing a new bigger dry-dock facility which would make the firm a strong contender for constructing the country’s next indigenous aircraft carrier, PTI reported citing a CSL official earlier last week. The CSL also plans to build a Rs 100 crore facility on the shore of Hooghly river in Kolkata for constructing vessels for inland water transport system.
The PSU company has clocked a revenue of Rs 2,059 crore in FY17, with 74% contribution from the ship building side and the rest from repairs. The profit after tax was at Rs 312 crore.