Govt invites bids from merchant bankers for Cochin Shipyard IPO
1 min read 28 Jan 2016, 07:53 PM ISTThe government has asked merchant bankers to submit bids for the IPO mandate by 18 February
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Mumbai: The Union government on Thursday invited bids from merchant bankers for the proposed initial public offer (IPO) of its Cochin Shipyard Ltd, according to information put up on the website of the department of divestment.
The proposed IPO will see the government reduce its stake in the company by 10%. Cochin Shipyard will also issue fresh shares through the IPO to raise capital for funding future growth plans.
In the IPO, Cochin Shipyard proposes to sell 3.39 crore equity shares.
The government has asked merchant bankers to submit bids for the IPO mandate by 18 February.
The 44-year-old shipyard is currently building an indigenous aircraft carrier for the Indian Navy. The firm was awarded the Miniratna-I status in 2008 in recognition of its performance.
The yard has the capacity to build ships up to 110,000 dead weight tonnage (DWT, a measure of the weight a ship can safely carry) and undertake repairs to ships of up to 125,000 DWT.
Since 2001, Cochin Shipyard has exported more than 40 ships to international owners. The company has also successfully undertaken repairs of a number of important ships like the aircraft carrier of Indian Navy, ships of domestic clients such as Shipping Corp. of India Ltd, Indian Navy, Coast Guard, and also oil rigs of Oil and Natural Gas Corp. Ltd.
The call for bids for the Cochin Shipyard IPO comes close on the heels of the divestment offer for Engineers India Ltd announced by the government on Wednesday, representing renewed vigour on the divestment front ahead of the Union budget next month.
On Wednesday, the government announced that it will pare 10% of its stake in Engineers India Ltd through an offer for sale to be launched on 29 January. The government holds a 69.3% stake in Engineers India.
On the floor price of ₹ 189 per equity share announced on Thursday evening, the issuance will fetch the government almost ₹ 635 crore.
So far, this financial year the government has managed to execute four divestments, raising around ₹ 12,642 crore. The government had set itself a divestment target of ₹ 41,000 crore in the last budget.
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