Cochin Shipyard share price falls 4% as OFS opens today for non-retail investors. Details here

Cochin Shipyard share price fell as much as 4% to ₹1,445 on NSE in Tuesday's trading session after the government launched an Offer for Sale (OFS) to sell up to a 5.04% stake in the state-owned shipbuilding company.

The stock opened at ₹1,451.20 apiece today, as compared to previous close of ₹1,524.10 apiece on Monday.

Cochin Shipyard OFS details

The government has announced an offer for sale (OFS) of up to a 5.04% stake in Cochin Shipyard, setting the floor price at ₹1,400 per share. The OFS will open for non-retail investors on July 7, while retail investors can submit their bids on July 8.

As part of the transaction, the Centre will initially divest a 2.52% stake in the company. It has also retained an additional 2.52% stake under the green-shoe option, allowing the total stake sale to increase to 5.04% if investor demand remains robust.

An OFS is a mechanism that enables promoters, including the government, to offload shares in a listed company through the stock exchange platform.

The floor price of ₹1,400 represents the minimum bid price for investors. The final price and share allocation will be determined based on investor demand, bids received, and the price discovery process during the OFS.

The bidding process will begin with non-retail investors, followed by a dedicated bidding window for retail investors on the next day. While retail participants are often offered discounts in OFS issues, the current announcement specifies only the floor price and the offer structure.

The inclusion of the green-shoe option provides the government with the flexibility to sell an additional stake if the issue receives strong demand. If both the base offer and the green-shoe option are fully subscribed, the government's holding in Cochin Shipyard will reduce by 5.04%.

The proposed stake sale forms part of the government's FY27 disinvestment programme. Since the OFS involves only the sale of existing shares and not a fresh equity issuance, Cochin Shipyard will not receive any proceeds from the transaction. However, a successful issue will increase the company's public shareholding.

Cochin Shipyard is among India's leading public sector companies engaged in shipbuilding and ship repair. The stock has attracted significant investor interest over the past year, supported by the strong outlook for the defence and shipbuilding sectors amid higher government spending on defence manufacturing, naval modernisation, and Make in India initiatives.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.