Mazagon Dock Shipbuilders' IPO to open on Sep 29; price band at Rs 135-145/share

State-owned defence firm Mazagon Dock Shipbuilders Ltd (MDL) on Thursday said its initial public offering will open for bidding on September 29 and the price band for the issue has been fixed at Rs 135-145 per share.

State-owned defence firm Mazagon Dock Shipbuilders Ltd (MDL) on Thursday said its initial public offering will open for bidding on September 29 and the price band for the issue has been fixed at Rs 135-145 per share. The initial public offer is for 3,05,99,017 shares through an offer for sale (OFS). The issue will close for subscription on October 1, the company said at a virtual press conference. The offer is expected to raise about Rs 444 crore at the upper end of the price band and at the lower range about Rs 413 crore. Shares of the company are proposed to be listed on BSE and NSE. The offer and net offer will constitute 15.17 per cent and 15 per cent, respectively, of the post-offer paid-up equity share capital of the company, it said. MDL, which received the 'Miniratna' status in 2006, is the only shipyard to have built destroyers and conventional submarines for the Indian Navy. With an order book to the tune of Rs 54,0470 crore, it is also one of the first shipyards to manufacture Corvettes (small warships) in the country. MDL had planned to come out with its IPO last September but the plan could not fructify due to low demand. Speaking at the press conference, Joint Secretary in the Ministry of Finance, Alok Pande, said that while the impact of COVID-19 was limited on some sectors, industries like airlines and hospitality were hit hard. Therefore, some of the timelines and targets have to be recalibrated because of that, he said. On the pricing of the IPO, he said the government was conscious of the after-market performance also, adding that the pricing has tried to strike a balance between value maximisation for the government and also for the investors. MDL Chairman and Managing Director Narayan Prasad said with the Make in India initiative and the on-going indigenisation programme, there is going to be a substantial saving to the tune of Rs 450-500 crore going forward. The company posted a net profit of Rs 477 crore, including the share of its associate company Goa Shipyard, on a revenue of Rs 5,535 core in the fiscal year 2019-20, MDL Director for Finance and Chief Financial Officer Sanjeev Singhal said. He said MDL is trying to adhere to project timelines which it had planned in advance, including delivery of submarines, which is expected either this year or the early part of next year. "We are trying to maintain the timelines with respect to the project schedule. Also, we don't anticipate any delays on account of COVID-19, " he said. Singhal also said MDL is targeting 15-20 per cent revenue from the ship repair business over the next five years, from 3.5 per cent in FY2020.  YES Securities, Axis Capital, Edelweiss Financial, IDFC Securities and JM Financial are the managers to the offer.