Mumbai : Mazagon Dock Shipbuilders Limited (MDSL) — India’s only shipyard to have built destroyers and conventional submarines for the Indian Navy –witnessed an enthusiastic response on its closing day in receiving bids of 4,816,459,117 shares against the offered 3,05,99,017 shares, as per the 5pm data available on the websites of BSE and NSE.
The portion reserved for retail investors was subscribed 35.63 times. Non-Institutional Investor category was subscribed 678.88 times, and Qualified Institutional Buyer category was subscribed 89.71 times. The employee category was fully subscribed at 3.88 times. The Non Institutional Portion subscription has been the second highest in the last decade after Apollo Microsystems which was a NII response of 958 x.
Commenting on the success of the IPO, Vice Admiral, Narayan Prasad, CMD, Mazagaon Dock Ltd said “The IPO was at a planning stage for the last 2 years and its current closure has been extremely successful. It’s indeed a matter of great honor, pride and privilege for team MDL to convey our profound thanks to all institutional investors and individual shareholders who participated in MDL’s IPO and reposed their faith in the company. We are constantly working towards sustaining our leadership position in defense ship/submarine building as well as looking actively at the Repair/Maintenance segment and export markets for adding additional revenue to the company.”
MDSL, a wholly-owned GoI company conferred with the Mini Ratna I status, had successfully launched its IPO from September 29, 2020 to October 1, 2020 and received bids of 23,01,16,111 shares against the offered 3,05,99,017 shares, which had been priced at Rs 135 to Rs 145 per equity share.
The objects of the Offer included disinvestment of 30,599,017 Equity Shares by the Selling Shareholder constituting 15.17% of our Company’s pre-Offer paid up Equity Share capital. Issue Proceeds will go to the President of India, acting through the ministry of defense, Government of India (the Selling Shareholder).
Besides an established track record and profits posted continuously in the last 4 fiscals, Mazagaon Dock’s FY20 revenue stood at Rs. 34,766.96 million from the shipbuilding division and Rs 14,935.39 million from the submarine and heavy engineering division. As of July 31, 2020, the company’s Order Book stood at Rs. 540,740 million comprising of three major shipbuilding projects and two submarine projects.
Going forward besides focusing on the ship repair services, the company management plans to revive its exports of defence and other commercial products to Latin America, Africa, South East Asia, Middle East and some European Regions for which it has already entered into agency agreements with sales agents.
Collectively brokerage houses such as Geojit, Angel Broking, Mehta Equities Ltd., BP Equities Pvt Ltd., Asit C Mehta, Philip Capital, Religare Broking, SMC Capital, Ventura Securities, Choice broking, Hem Securities, Sushil Finance, ICICI Securities, LKP Securities, Nirmal Bang have given a “subscribe” rating to the issue with a medium and long term objective in mind, citing its revenue visibility, healthy ROE, debt free status, world class infrastructure facilities, expansion and diversification plans, export revival plans besides its lower valuation viz peers. YES Securities Ltd, Axis Capital Ltd, Edelweiss Financial Service Ltd, Dam Capital erstwhile IDFC Securities Ltd and JM Financial Ltd are the BRLMs to the Issue.
MSDL is a defense public sector undertaking shipyard under the Department of Defence Production, MoD with a maximum shipbuilding and submarine capacity of 40,000 DWT (CRISIL Report), engaged in the construction and repair of warships and submarines for the MoD for use by the Indian Navy and other vessels for commercial clients. It is a wholly owned GoI company, conferred with the ‘Mini-ratna-I’ status in 2006, by the DPE.
Headquartered in Mumbai and strategically located on the west coast of India, Mazagon Dock was incorporated as a private limited company in 1934 and in the year 1960, the GoI took over our Company to expand its warship development programme designating it as a DPSU under the MoD. Currently it operates in 2 business segments – shipbuilding and submarine & heavy engineering.
MSDL is “India’s only shipyard” to have built destroyers and conventional submarines for the Indian Navy and also one of the initial shipyards to manufacture Corvettes (Veer and Khukri Class) in India. The business divisions in which the Company operates are: (i) shipbuilding and (ii) submarine and heavy engineering. Its shipbuilding division includes the building and repair of naval ships.
Since 1960, MSDL has built a total of 795 vessels including 25 warships, from advanced destroyers to missile boats and three submarines. The Company has also delivered cargo ships, passenger ships, supply vessels, multipurpose support vessels, water tankers, tugs, dredgers, fishing trawlers, barges and border outposts for various customers in India as well as abroad.
In the last 18 fiscals, MDSL has delivered 27 warships building projects and 5 submarines and heavy engineering projects that include refit and repairs of ships and submarines. Some of the recent warships delivered by Mazagon dock are: INS Kolkata, INS Kochi and INS Chennai. The last vessel it delivered to the MOD for use by the Indian Navy was a Scorpene class submarine- INS Khanderi in 2019. The 1st Scorpene class submarine INS Kalvari was delivered in 2017.
The Company is currently building four P-15 B destroyers and four P-17A stealth frigates and undertaking repair and refit of a ship for the MoD for use by the Indian Navy. Its submarine and heavy engineering division includes building, repair and refits of diesel electric submarines. The Company is currently building/ in the process of delivering four Scorpene class submarines under a transfer of technology agreement with Naval Group as well as one medium refit and life certification of a submarine for the MoD for use by the Indian Navy.
