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Mazagon Dock Shipbuilders Lists At 48% Premium Against IPO Price

Shares of Mazagon Dock Shipbuilders Ltd. pared some of its early gains but closed higher on its first day of trading after a blockbuster initial public offering.
The stock opened at Rs 214.9 apiece, a 48% premium over its issue price of Rs 145, according to data available on the exchanges. The scrip, however, closed at Rs 171.95 apiece—18% higher than the issue price.
That compares with a 24-115% premium on listing by previous debutantes such as CAMS Ltd., Route Mobile Ltd., Happiest Minds Technologies Ltd. and Chemcon Specialty Chemicals Ltd. Angel Broking Ltd., however, debuted at a discount of 10%.
Mazagon Dock’s IPO—an offer-for-sale worth Rs 444 crore by promoter Indian government—had received a stellar response from investors, subscribing 157.41 times on the last day of bidding earlier this month. That’s higher than 112 times subscription of IRCTC’s IPO in October last year.
The portion reserved for non-institutional investors was subscribed 678.88 times, while qualified institutional buyers and retail investors bid 89.71 times and 35.63 times, respectively, for the shares earmarked for them.
Promoter shareholding in the only shipyard that builds destroyers and conventional submarines for Indian Navy fell to 84.8% from 100% after the IPO.
Mazagon Dock expects to benefit from the government’s Atmanirbhar Bharat project as increase in local manufacturing will aid its order book.
The Atmanirbhar plan will positively impact private and public shipyards. Also, manufacturing of ships has been placed under the negative list, Vice Admiral Narayan Prasad, chairman and managing director at the shipyard under the Ministry of Defence, had told BloombergQuint in an interview. “Future order books worth Rs 90,000 crore for submarines and destroyers are in the offing for the shipping defense industry.”
The company’s current order book stands at Rs 54,074 crore—entirely from the Ministry of Defence. That, according to Vice Admiral Prasad, provides a revenue visibility for the next six-seven years. Read from source….