State defense company Mazagon Dock Shipbuilders made a strong debut today. Mazagon Dock shares listed on ₹190 on EEB compared to the issue price of ₹145. The Mazagon Dock Shipbuilders IPO was subscribed a whopping 157.41 times. the ₹The 444 crore public offering received offers for 4.81.64.59,117 shares against 3.05.99.017 shares on offer.
The retail investor segment was subscribed 35 times, while the portion reserved for non-institutional investors was subscribed 678.88 times and qualified institutional buyers 89.71 times.
By comparison, UTI AMC shares are trading at a discount today on exchanges.
Mazagon Dock Shipbuilders joined companies such as IRCTC, Cochin Shipyard and Housing and Urban Development Corporation Ltd (HUDCO) in having received stellar response from investors for their initial public offerings.
Mazagon Dock Shipbuilders is engaged in the construction and repair of warships and submarines for use by the Indian Navy and other vessels for commercial customers, according to the red herring prospect.
The company, which received ‘Miniratna’ status in 2006, is the only shipyard to have built conventional destroyers and submarines for the Indian Navy. Mazagon Dock Shipbuilders posted a net profit of ₹Rs 477 million, including the share of its partner company Goa Shipyard, on revenue of ₹5,535 core in fiscal year 2019-20.
Many brokerages had recommended subscribing to the offering, citing an attractive valuation, a strong order book and a new defense procurement policy that is expected to accelerate indigenization.
Garden Reach Shipbuilders and Engineers was the last shipbuilding PSU company to be listed on the exchanges in 2018. Prior to that, Cochin Shipyard was listed in 2017.
Yes Securities, Axis Capital, Edelweiss Financial Services, DAM Capital Advisors and JM Financial are the managers of the offering.
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