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Mazagon Dock Shipbuilders IPO: Study Before Subscribing

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It’s again a full house in the IPO market with three companies lined up together for subscription. One of them is Mazagon Dock Shipbuilders IPO, a public sector company, the only firm in India that makes destroyers and submarines for the Indian Navy. This IPO is part of the disinvestment plan of the government. Here’s all about the company and issue for the Mazagon IPO subscription.

About Mazagon Dock Shipbuilders

MDL is a Defence Public Sector Undertaking under ministry of Defence. It is one of the India’s leading shipyards with a capacity to meet requirements of the Indian Navy.

The shipyard builds warships and conventional submarines at its facilities in Mumbai and Nhava. Major customers for the shipyard include Indian Navy and Coast Guard.

Since 1960, MDL has built a total of 795 vessels including 25 warships, from advanced destroyers to missile boats and three submarines. MDL had also delivered cargo ships, passenger ships, supply vessels, multipurpose support vessels, water tankers, tugs, dredgers, fishing trawlers, barges and border outposts for various customers in India as well as abroad.

Mazagon IPO Details

OPENS ON: SEPT 29, 2020
CLOSES ON: OCT 01, 2020
Price band: Rs 135- Rs 145
Lot size: 103 shares
1 lot costing: Rs 14,935
Listing on: NSE, BSE
Issue size: Offer for sale Rs 443.69 cr
Offer For Sale: Government which has 100% ownership of the company will offload 30,599,017 equity shares which constitutes 15.17% of pre-offer equity share capital bringing down its stake to 84.8%.
Will list on exchange on Oct 12, 2020


Interesting facts about Mazagon Dock Shipbuilders IPO:

  • Mazagon is the only public sector defense shipyard constructing conventional submarines.
  • The business divisions in which the company operates are (i) shipbuilding and (ii) submarine and heavy engineering.
  • Company is a beneficiary from the increase in the indigenization of the vessels and implementation of the “Make in India” campaign.
  • Under shipbuilding business company is currently building four P-15 B destroyers and four P-17A stealth frigates and undertaking repair and refit of a ship for the MoD for use by the Indian Navy.
  • Under submarine business company is currently building/ in the process of delivering five Scorpene class submarines under a transfer of technology agreement with Naval Group as well as one medium refit and life certification of a submarine for the MoD for use by the Indian Navy.
  • Company is predominantly dependent on the MoD for defence orders. Further, recent changes in the policy framework governing defence procurement and manufacturing in India may result in company being no longer given such orders which may have an adverse effect on business growth, financial condition and results of operations.
  • The company witnessed declining EBITDA and PAT margins since FY17. Further, company has contingent liabilities. The realization of contingent liabilities may adversely impact profitability and may have a material adverse effect on results of operations and financial condition.
  • Previously, the DPP 2016 has encouraged the domestic private sector to invest and participate in defence production which may have an impact on ability to secure future orders from the MoD.

To apply for Mazagon Dock Shipbuilders IPO, you can do it from our website Marwadi Shares & Finance Ltd.

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