Cochin Shipyard Rs 1,470-cr IPO subscribed 76 times as investors pile in

The initial public offering (IPO) by state-owned Cochin Shipyard saw 76 times more demand than shares on offer.

The institutional investor portion of the issue was subscribed 63.5 times for the Rs 1,470-crore offering, high networth individual (HNI) portion was subscribed 289 times and retail portion was subscribed eight times.

Cochin Shipyard’s IPO comprised of fresh equity issuance worth Rs 980 crore and secondary share sale by the government worth Rs 490 crore. The fresh proceeds will be used by the company for capital expansion, which includes setting up of a dry dock and international ship repair facility. The price band for the IPO is Rs 424 to Rs 432 per share. Retail investors are being offered a discount of Rs 21 per share.

Following the IPO, the government stake in the company will decline from 100 per cent to 75 per cent. Cochin Shipyard is the second IPO by a public sector undertaking (PSU) this year after Housing and Urban Development Corporation’s (Hudco) in May.

Cochin Shipyard, country’s largest PSU shipbuilder in terms of dock capacity, is valued at Rs 5,870 crore at the top-end of the price band. For the year 2016-17, the company had reported net profit of Rs 312 crore on revenues of Rs 2,059 crore. The IPO was priced at nearly 19 times the company’s 2016-17 diluted earnings per share.