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Mazagon Dock IPO

 Mazagon Dock IPO


Mazagon Dock IPO

‘Ship Builder of the Nation’,

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Issue-
 Mazagon Dock Shipbuilders Ltd., a defence PSU, has announced opening of its initial public offering for subscription on September 29, with a price band of ₹135 – ₹145 per equity share.
Minimum bid lot is 103 equity shares and in multiples thereof. To carry out the disinvestment of 30,599,017 Equity Shares by the Selling Shareholder constituting 15.17% of the Company’s pre-Offer paid-up Equity Share capital.

Business model- 
The ‘Ship Builder of the Nation’, Mazagon Dock Shipbuilders Limited is a defense public sector undertaking shipyard that falls under the Department of Defence Production, MoD. It has a maximum shipbuilding and submarine capacity of 40,000 Dead Weight Tonnage.
The company is engaged in the construction and repair of warships and submarines for the MoD for use by the Indian Navy and other vessels for commercial clients. It is a wholly-owned Government of India company and the only shipyard to have built destroyers and conventional submarines for the Indian Navy. Mazagon Dock Shipbuilders Limited also has several workshops with machines and equipment for hull fabrication and constructing ships.



Objective of public offering-
The IPO will close on October 1. The offer is being made through book-building process. The object is to carry out the disinvestment of 30,599,017 equity shares by the Government of India, which will be diluting 15.17% of its stake in the company. On the lower price band the issue will fetch ₹413 crore and at the upper band ₹444 crore. “While many of the sectors saw limited impact, COVID-19 has hit the airlines and hospitality sector really hard. So some of our timelines and targets will have to be recalibrated,” Dr. Alok Pande, Joint Secretary, DIPAM, said.
 
Reasons for buy-
1. Strategic location
2.It has an experienced board and senior management team with a skillfully trained workforce
3. Mazagon Dock Shipbuilders will develop the 37-acre land it has adjacent to the Nhava Sheva port into a dockyard as the firm plans to diversify its order book, which is currently dependent on the Indian Navy.


Mayur Jagtap

Investment Consultant.



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