Mumbai: The initial public offering (IPO) of state-run shipbuilder Cochin Shipyard Ltd was subscribed 76.1 times on Thursday, the final day of the public offering, data from stock exchanges shows.
The public offering opened on 1 August.
As of 7pm, the portion of shares reserved for institutional investors was subscribed 63.52 times, while the portions reserved for high net-worth individuals and retail investors were subscribed 288.87 times and 8.28 times, respectively. Cochin Shipyard had set a price band of Rs424-432 per share for the initial share sale.
The IPO, a fresh issue of 22.65 million shares, will fetch the company Rs978 crore at the upper end of the price band. The union government is also selling 10% of its stake through and offer for sale of around 11.3 million shares. The successful IPO will mean that the government will fetch Rs489 crore through the share sale.
The funds from the fresh issue of shares will be used to fund two major projects and also to improve the shipbuilders’ existing facilities.
“Out of the total proceeds from the IPO, two-thirds will be used for expansion. We also have free cash reserves of Rs1,648 crore. The aggregate funds from both the sources will be used to fund two major projects, which will require Rs2,800 crore, improve present facilities, which will require Rs300 crore, and maintain sufficient free cash reserves for working capital requirements," said Madhu S. Nair, chairman and managing director, Cochin Shipyard, in an interaction with Mint on 24 July.
So far in 2017, the Indian primary market has witnessed 15 initial public offerings that have seen companies raised Rs12,584 crore, according to data from primary market tracker Prime Database. Some of the IPOs this calendar year include Central Depository Services (India) Ltd that was subscribed 169.45 times and AU Small Finance Bank that was subscribed 53.60 times.
In 2016, the Indian primary market saw 26 companies raise Rs26,493.8 crore through the IPO route, data shows.