Mazagon Dock Stake Sell: The central government plans to sell its 4.83% stake in Mazagon Dock Shipbuilders Ltd. This disinvestment will be done through Offer for Sale (OFS). The company has given this information in its exchange filing.
How much stake will the government sell?
The government will offer a base stake of 2.83% (about 57.1 lakh shares) under the OFS. Also, there is a possibility of selling an additional 2% (about 40.3 lakh shares) under the Green Shoe Option. This OFS will open for non-retail investors from April 4, 2025. At the same time, retail investors will be able to participate in it from April 7. The floor price for this has been kept at ₹ 2,525 per share, which is 8% less than the current market price (CMP).
What is the business of Mazagaon Dock?
Mazagon Dock Shipbuilders Limited is a leading company in the Indian defense sector. It is also known as 'Ship Builder to the Nation'. It specializes in manufacturing warships like Destroyers, Frigates and Corvettes. It is the only shipyard in India that builds conventional submarines. This also includes Scorpene-Class submarines.
Mazagon Dock also manufactures and repairs commercial vessels such as cargo ships, tug boats and dredgers. It has built over 800 ships since 1960. This includes 25 warships and 3 submarines. Currently, the company has an order backlog of over ₹54,000 crore.
Why is the government selling its stake?
The government currently has 84.83% stake in Mazgaon Dock, while the public has only 15.17%. After this sale, the government's stake can come down to 80%. The government has many motives behind selling stake in Mazgaon Dock. Let us know about them as well.
- This sale is part of the government's strategy to raise revenue through disinvestment to meet its financial needs.
- According to SEBI rules, any listed company should have at least 25% public shareholding. The government is gradually moving in this direction.
- Mazgaon Dock's IPO came in 2020. Since then its shares have increased by 3,000%. In such a situation, the government can book profit by selling its stake at a higher valuation.
