Cochin Shipyard shares started trading up 8 per cent at Rs461 on its trading debut on the National Stock Exchange, and rose further to hit a high of Rs528.15 in early trade, up more than 22.25 per cent over its issue price of Rs432.
Shares of Cochin Shipyard Ltd (CSL) gained as investors bet on strong growth prospects for the state-run company buoyed by a flagship government programme and push to localise defence manufacturing.
Since the CSL issue had seen overwhelming support from individual investors, market expected a higher listing premium for the scrip. But for a weak market, the stock would have put up an even stronger show, say market analysts.
The financials and fundamentals of the company were strong in the last five years, and the public issue was subscribed 76.19 times.
At 10:05 am, the stock was trading at Rs524 on the NSE, against issue price of Rs432 and pre-opening price of Rs440.15.
On the BSE, the stock was locked in upper circuit of Rs522, up 21 per cent against its IPO price after making a debut at Rs435. A combined 12.7 million shares changed hands on the counter on NSE and BSE till 10:07 am.
Cochin Shipyard raised more than Rs1,450 crore through its share sale that comprised a fresh issue of 22.656 million shares and an offer for sale of 11.328 million shares by the President of India.
CSL, the largest public sector shipyard, will utilise fresh issue proceeds of Rs978.74 crore for setting up of a new dry dock within the existing premises, besides setting up of an international ship repair facility at Cochin Port Trust area; and general corporate purposes.
Cochin Shipyard caters both government, including defence, and private sector clients in the commercial sector worldwide. In addition to shipbuilding and ship repair, it also offers marine engineering training.