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Mazagon Dock Shipbuilders(Mazagon Dock IPO Review)

Mazagon Dock IPO Review

Mazagon Dock Shipbuilders was incorporated in 1934 under the Ministry of Defence. The company is also one of India’s leading defense public sectors undertaking shipyards. The company is basically engaged in constructing and repairing warships as well as submarines for the MoD. Not only that the company also engaged in making and repairing other various types of vessels like cargo ships, multipurpose support vessels, barges, and border outposts, tugs, dredgers, water tankers, etc. for their commercial clients. Mazagon is the only shipyard to build destroyers and conventional submarines. These vehicles are being used by the Indian Navy. The article consists of Mazagon Dock IPO Review, issue details, company details.

Mazagon Dock IPO Details

IPO DateSep 29, 2020 – Oct 1, 2020
Issue TypeBook Built Issue IPO
Issue Size30,599,017 Eq Shares of ₹10
(aggregating up to ₹443.69 Cr)
Offer for Sale30,599,017 Eq Shares of ₹10
(aggregating up to ₹443.69 Cr)
Face Value₹10 per equity share
IPO Price₹135 to ₹145 per equity share
Market Lot103 Shares
Min Order Quantity103 Shares
Listing AtBSE, NSE
Company DRHP

Mazagon IPO – Basis of the Offer Price

The Offer Price of the IPO will be determined by Mazagon Dock Shipbuilders in consultation with the Selling Shareholder as well as the lead managers. This would be determined on the basis of the evaluation of market demand. For the Equity Shares determined through the Book Building Process and also on the basis of quantitative and qualitative factors.

The qualitative factors impacting the Offer Price are:

  • The public sector defense shipyard that only constructs conventional submarines;
  • World class infrastructure that is capable of serving the requirements of the Ministry of Defense;
  • Location of facilities promotes closer association with vendors and aslo with the customers;
  • Increase in indigenisation of vessels as well as implementation of the “Make in India” campaign
  • Established track record with strong financial position and strong Order Book;
  • Experienced board and senior management team and also with the help of skillfully trained workforce.

About the Company

  • The business has 2 key operating divisions – The shipbuilding division that undertakes the building and repairing of naval ships, whereas the Submarine and heavy engineering division includes building, repairing, and refitting of diesel-electric submarines.
  • Till 2020, the company has built 795 vessels, including 25 warships, 4 missile boats, 3 submarines, 6 Leander class frigates, 3 Godavari class frigates, 3 Shivalik class frigates, 3 corvettes, and 6 destroyers.
  • Mazagon Dock shipyard is strategically located on the west coast of India, the sea route that connects Europe, the Pacific Rim, and West Asia.
  • The company’s business divisions include (i) shipbuilding and (ii) submarine and heavy engineering. The shipbuilding division includes the building and repair of naval ships. It 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.
  • The submarine and heavy engineering division includes building, repair and refits of diesel electric submarines. It is currently in the process of delivering five Scorpene class submarines under a technology transfer 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.
  • Since 1960, the company has built a total of 795 vessels including 25 warships, from advanced destroyers to missile boats and three submarines. Mazagon Dock has 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.

Competitive Strength

• It is India’s leading public sector defence shipyard company.
• The company has World class infrastructure facilities.
• Also, Strategic location at Mumbai on the west coast of India.
• Strong order book and financial position.

Company Promoters:

The President of India acting through the Ministry of Defence, GoI is the promoter of the company.

Company Financials:

ParticularsFor the year/period ended (₹ in million)
Total Assets209,660.28208,479.34193,703.72193,911.65
Total Revenue55,353.0752,046.7450,276.2942,748.63
Profit After Tax4,770.595,324.744,961.735,982.58

Objects of the Issue:

The net proceed from the IPO will be used towards following objectives;

  • To carry out the disinvestment plan of 30,599,017 equity shares by selling shareholders constitutes 15.17% of pre-offer equity share capital
  • To achieve the benefits of share listing on the stock exchanges.

Mazagon Dock IPO Review

Company financials reflect a steady income throughout the years. The PAT (profit after tax) is good enough. The EPS of the company was 21.36 in the FY20. The company has not revealed the PE ratio yet. Return on Net worth was as per the financial year was 15.54. These are some of the important fundamental ratios, you can get from the company DRHP. If you want more guarantees about the subscription, you may check the NSE bid details from the NSE official sites and grey market premium details from our site. According to our report and analysis, Mazagon Dock IPO Review carries a NEUTRAL view.

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