Cochin Shipyard: The government to sell up to a 5% stake in an OFS

The biggest ship repair and construction facility in India is Cochin Shipyard Ltd. It is a component of a chain of amenities for mariners in the Indian state of Kerala’s port city of Kochi. The shipyard’s services include the construction of double-hulled oil tankers and platform supply vessels.

The central government plans to sell off a five percent share in Cochin Shipyard Ltd.

Under an Offer for Sale (OFS) with a minimum share price of Rs. 1,540, the Central Government has declared its intention to sell off a 5% stake in Cochin Shipyard Ltd. The OFS is slated to open for non-retail investors on October 16, 2024, and for retail investors on October 17.

The OFS offers a base offer of 2.5% and a green shoe option that allows users to receive an extra 2.5%. For investors who are not retailers, the sale is scheduled to start on October 16, and for retailers, on October 17. As of September 30, the government held a 72.86% stake in Cochin Shipyard.

Performance of Cochin Shipyard.

In comparison to the same quarter last year, when it made Rs. 98.7 crore, Cochin Shipyard reported a stunning 76.5% year-over-year increase in net profit, which came to Rs. 174.2 crore for the quarter ending June 30, 2024. The company’s operational revenue increased significantly by 61.1%, from Rs. 475.9 crore to Rs. 771.5 crore during the same period of the previous fiscal year.

Earnings before interest, tax, depreciation, and amortization (EBITDA) for the company more than doubled at the operational level, rising by 125% to Rs. 177.3 crore. The EBITDA margin grew to 23% in the reporting quarter from 16.5% in the corresponding period of the prior fiscal year.

Growth of Cochin Shipyard.

The shipbuilding division of Cochin Shipyard, which saw revenue rise by 62% from the previous year to Rs. 527 crores, was the main driver of the company’s growth. The company’s total revenue is derived from this segment to the tune of 68%.

The company’s Ship Repair division, which makes up 32% of total sales, saw a 63% increase in revenue to Rs. 245 crore last year, while margins increased to 43% from 24% the year before.

Stock in Cochin Shipyard Ltd. has dropped 5%.

Due to the Central government’s decision to sell a 5% stake in Cochin Shipyard, the stock of Cochin Shipyard Ltd. is currently trading at Rs. 1,598.00 per share, a 5% decrease.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.