NEW DELHI: The government has announced plans to offload up to 5 per cent of its equity in Cochin Shipyard through an Offer for Sale (OFS), with a floor price of Rs1,540 per share.
This marks an 8 per cent discount to Tuesday’s closing price of Rs1,673, where the stock saw a 3 per cent rise, gaining Rs48.60 over Monday’s close.
The sale will kick off on October 18, targeting non-retail investors initially, while retail investors and employees can participate in the next phase, which will be done on October 19.
In detail, the base OFS involves selling a 2.5 per cent stake, or 65.77 lakh shares, with an option to sell an additional 2.5 per cent stake if demand is robust, utilising the green shoe option.
Cochin Shipyard is a share that has swayed widely between its 52-week high of Rs2979.45 and the 52-week low of Rs435.60.
Govt stake
The government of India currently holds around 72.86 per cent stake in Cochin Shipyard prior to this Offer for Sale (OFS) of up to 5 per cent announced on Tuesday.
Cochin Shipyard had done its initial public offering (IPO) in August 2017 where the government offloaded 25 per cent holding to raise approximately Rs1442 crore.
The IPO was set in the range of Rs424 and Rs432 per share.
The OFS move aligns with the government’s ongoing divestment program to reduce its shareholding in public sector enterprises and raise capital.
Strong interest
Despite the 8 per cent discounted floor price, the recent share price rally suggests strong interest in Cochin Shipyard, which is a key player in India’s shipbuilding and repair sector.
“Investors will likely be drawn by the company’s solid track record, growing order book, and increasing global demand for maritime infrastructure,” said an analyst while talking to businessbenchmark.news.
“The discount could spark demand from institutional and retail investors eager to capitalise on the pricing gap,” he added.
The OFS will be executed during normal trading hours through a separate window.
Investors are eyeing this sale as part of the government’s broader disinvestment target for the fiscal year, and the offering may offer attractive entry points for those bullish on the company’s future growth, particularly as global maritime needs expand.
