Kochi Shipyard makes strong market debut after $225 million IPO

Gladys Abbott
August 12, 2017

The financials and fundamentals of the company were strong in the last five years, and the public issue was subscribed 76.19 times.

India's Cochin Shipyard Ltd shares rose more than 20 percent on their trading debut on Friday after a $225 million initial public offering, as investors bet on strong growth prospects for the state-run company buoyed by a flagship government programme and push to localise defence manufacturing. The shares opened at Rs 440.15 and touched a day's low of Rs 435, before closing at the day's high of Rs 528.15/share.Though the Cochin Shipyard share prices rallied, the company's employees could not capitalise on the bonanza as they did not fully bid for the shares earmarked for them. The issue constituted 25% of the post issue paid-up equity share capital. Through this IPO, the government divested 10% stake in the shipbuilder, with the total collection at the close of the offer at about Rs 1.1 lakh crore, against its offer size of just Rs 1,468 crore.

Cochin Shipyard raised more than Rs1,450 crore through its share sale that comprised a fresh issue of 22.656 million shares and an offer for sale of 11.328 million shares by the President of India. The company will not receive any proceeds from the offer for sale.

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Cochin Shipyard caters to clients engaged in defence sector in India and clients engaged in the commercial sector worldwide.

Gadkari said looking at the opportunity in the inland waterways sector, the shipyard has also partnered with a state-run yard in Hoogly near Kolkata to build and maintain smaller vessels. The PSU will use the proceeds from the share sale (Rs 978.74 crore) for setting up a new dry dock within the existing premises and building an global ship fix facility at Cochin Port Trust area, besides other general corporate purposes.CSL reported a net profit of Rs 312 crore on revenues of Rs 2,059 crore in 2016-17.

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