Cochin Shipyard Ltd., India’s largest public sector ship builder, will launch is initial public offering on August 1.
The company plans to raise Rs 1,470 crore, of which Rs 979 crore would come through a fresh issue and Rs 489 crore via an offer for sale by the President of India acting through the Ministry of Shipping. The ship builder will offer shares at Rs 424-432 apiece.
SBI Capital Markets Ltd., Edelweiss Financial Services Ltd. and JM Financial Institutional Securities Ltd. are the book running lead managers to the issue.
The proceeds from the IPO would go towards two projects – setting up of a new dry dock and setting up of an international ship repair facility at Cochin Port Trust area.
Madhu Nair, Chairman And Managing Director, Cochin ShipyardFor these two projects together we are putting in Rs 2,800 crore and the fresh issue part of the proceeds would be used for them.
The dry dock project is expected to begin by January next year while the civil work on the ship repair facility would begin by November this year.
The IPO plan had set off an opposition by trade unions fearing privatisation, but Nair said that the company is in talks with the unions and is sure they would come on board.
The company currently has a ship repair dock that can accommodate vessels with a maximum capacity of 110,000 deadweight.
As of September 30, 2016, shipbuilding order book consisted of nine vessels with an aggregate outstanding revenue value of Rs 3,078 crore, according to the prospectus filed by the company.
The company is building India’s first indigenous aircraft carrier for the Indian Navy and has also formed a joint venture with Hooghly Dock and Ports Engineers Ltd., which will help the company foray into inland waterways.
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