The government of India is preparing to divest up to 5% of its stake in Cochin Shipyard Limited through an Offer for Sale (OFS). This initiative includes a base offer of 2.5%, equating to 6,577,020 equity shares, along with an additional 2.5% green shoe option. The floor price for the shares has been set at ₹1,540 per share, which represents an 8% discount to the company’s closing price of ₹1,672 on Tuesday.
The OFS will open for non-retail investors on October 16, 2024, while retail investors can participate starting on October 17, 2024. This structured approach allows different categories of investors to engage in the stake sale at designated times. The shares will be available through a separate window on the stock exchanges, specifically the BSE and NSE.
Eligible employees of Cochin Shipyard may apply for shares worth up to ₹2 lakh, with a total of 25,000 shares reserved for them, constituting about 0.19% of the total offer size. The allocation will be prioritized based on price for non-retail investors, while retail investors can bid at the cut-off price.
The government aims to raise substantial capital through this stake sale in Cochin Shipyard, which is recognized as one of India’s leading public sector shipbuilding and maintenance companies. The offer is being managed by several brokers, including DAM Capital Advisors, Axis Capital, and BOB Capital Markets.
This divestment follows a period of strong financial performance for Cochin Shipyard. As of June 2024, the government held a 72.86% stake in the firm. The company has shown impressive growth, with net profit increasing by 76.5% year-on-year to ₹174.2 crore in its most recent quarter, driven by significant revenue growth in its shipbuilding segment.
Investors should be aware that this offer presents an opportunity to invest in a well-established entity within the Indian maritime sector. However, it is essential to conduct thorough research or consult with a financial advisor before making investment decisions.
Disclaimer: The information provided is for informational purposes only and should not be considered as financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
