Cochin Shipyard plans to raise Rs1,470 crore through IPO

Cochin Shipyard Ltd (CSL), India's largest largest public sector shipyard, intends to raise about Rs1,470 crore through an Initial Public Offering (IPO) that will open on 1 August and close on 3 August.

The shipyard has fixed a price band of Rs424-432 per equity share, and consists of 33,984,000 equity shares of face value of Rs10 each. The issue comprises a fresh Issue of 22,656,000 equity shares and an Offer for Sale (OFS) of 11,328,000 shares by the Ministry of Shipping.

Of the total Rs1,470 crore, Rs979 crore would come through a fresh issue and Rs489 crore through the OFS.

''We want to set the next phase of growth and aspirations of the company. We will utilise the net proceeds for setting up a new dry dock within the existing premises, for setting up of an international ship repair facility (ISRF) at Cochin Port Trust area and for general corporate purposes,'' Madhu S Nair, chairman and managing director of CSL said in a press conference here in Mumbai.

''For these two projects (new dry dock and ISRF) we are putting in Rs2,800 crore and the fresh issue part of the proceeds would be used for them,'' he added.

The dry dock project is expected to begin by January 2018, while the civil work on the ship repair facility would begin by November this year.

The company currently has a ship repair dock that can accommodate vessels with a maximum capacity of 110,000 deadweight tonne.

As of 30 September 2016, shipbuilding order book consisted of nine vessels with an aggregate outstanding revenue value of Rs 3,078 crore. The shipyard is also building India's first indigenous aircraft carrier for the Indian Navy.

It had also formed a joint venture with Hooghly Dock and Ports Engineers Ltd to foray into inland waterways.

SBI Capital Markets Ltd, Edelweiss Financial Services Ltd and JM Financial Institutional Securities Ltd are the Book Running Lead Managers to the issue. Link Intime India Pvt Ltd is the registrar to the issue. The company's shares are proceeds to be listed on BSE Ltd and National Stock Exchange of India Ltd.