Cochin Shipyard IPO opens for subscription

The Rs1,460-crore initial public offer of Cochin Shipyard Limited got off to a slow start as the share sale opened on the Bombay and national stock Exchanges in the morning today.

The IPO is following the book-building process wherein the price band for the issue is set at Rs424 to Rs 432 per equity share, each having face value of Rs10.

The total issue, consisting of 3,39,84,000 shares, which opened for subscription today, will close on 3 August 2017.

The issue consists of a fresh issue of 22,656,000 equity shares and an offer for sale of 11,328,000 equity shares by the President of India. The issue and the net issue will constitute 25 per cent and 24.39 per cent, respectively, of the post-issue paid-up equity share capital of the company.

The IPO attracted total bids of 10,30,470 shares and total bids at cut-off price of 9,36,660 shares in morning trade with NSE data showing that the issue got subscribed by 3 per cent.

The company proposes to utilise the net proceeds of the issue for setting up a new dry dock within the existing premises of the company; setting up an international ship repair facility at Cochin Port Trust area (ISRF); and general corporate purposes.

SBI Capital Markets, Edelweiss Financial Services and JM Financial Institutional Securities are the Book Running Lead Managers (BRLMs) to the issue. The equity shares of the company are proposed to be listed on BSE Limited and National Stock Exchange of India Limited.

Cochin Shipyard (CSL) is the largest Indian public sector shipyard and it received `Miniratna' status in 2008. CSL operates a shipyard that provides shipbuilding and ship repair services in both defence and non-defence spaces. CSL generates 74 per cent of its revenue from shipbuilding and the remaining 26 per cent from ship repair.