Mazagon Dock Shipbuilders: Government To Sell Up To 4.83 Per Cent Stake Via OFS

The government is set to offload up to 4.83 per cent of its holding in Mazagon Dock Shipbuilders Ltd through an Offer for Sale (OFS) scheduled from April 4 to April 7. The floor price is fixed at Rs 2,525 per share, offering nearly an 8 per cent discount from the company’s April 3 closing price of Rs 2,735.40 on the BSE.

"Offer for Sale in Mazagon Dock Shipbuilders Limited (MDL) opens tomorrow for Non-Retail investors. Retail investors can bid on Monday. The government will divest 2.83 per cent equity with an additional 2 per cent as a green shoe option," DIPAM Secretary Arunish Chawla said in a post on X.

Additionally, the company comes with the green shoe option of 0.81 crore shares, amounting to Rs 2,037 crore.

According to an exchange filing, the sale will be conducted on both the NSE and BSE, with IDBI Capital Markets managing the transaction. Bidding is open to institutional investors on April 4, while retail investors can participate on April 5.

The government plans to sell an initial 2.83 per cent stake, with the option to offer an additional 2 per cent if demand is strong, taking the total divestment to 4.83 per cent. The move is aimed at aligning with SEBI’s public shareholding norms.

Shares of Mazagon Dock slipped 6.67 per cent during intraday trading on April 4, touching Rs 2,555 on the NSE after news of the OFS broke, at 11:18 am. Despite this, the stock has posted around 133.22 per cent gain during a period of 12 months. The company’s market cap currently stands at Rs 1,03,063.59 crore.

Within the OFS, 50,000 shares (0.26 per cent) are reserved for eligible employees, who can apply for up to Rs 5 lakh worth of shares. Retail investors, those bidding for up to Rs 2 lakh, will have 10 per cent of the offer set aside. A minimum of 25 per cent of the total offer is earmarked for mutual funds and insurance companies, assuming they bid at or above the floor price. Any unsubscribed portion will be reallocated among eligible bidders.

Non-retail participants may carry forward unallocated bids from April 4 to the next day. Final bids from retail investors, employees, and any carried-forward bids can be placed on April 7.

Mazagon Dock Shipbuilders, a defence public sector undertaking, manufactures warships and submarines for the Indian Navy and plays a strategic role in India’s maritime defence sector.

Mazagon Dock Shipbuilders was given "Navratna" status by the Department of Public Enterprises on June 26, 2024, making it the country's 18th PSU to receive this status.