Mazagon Dock IPO
Another company joining the list of companies launching an IPO this year is Mazagon Dock Shipbuilders Limited. Conferred with the ‘Mini-Ratna-I’ status in 2006, its IPO announcement has incited quite a buzz in the market. Here is a look at all the details of the IPO.
How to Apply for Mazagon Dock IPO?
You can apply for Mazagon Dock IPO on Groww easily via UPI. Go to IPO ( login to your account). There you would be able to see the list of all open IPOs. Select Mazagon Dock IPO and click on ‘Apply’. You would be able to invest in this IPO on 29th September 2020.
Read More: Steps to Invest in IPO on Groww
Mazagon Dock Shipbuilders Limited IPO Details
| IPO Date | September 29, 2020 to October 01, 2020 |
| Issue Type | Book Built Issue IPO |
| Issue Size | 30,599,017 Equity Shares of Rs.10 (totaling up to Rs.443.69 Crore) |
| Fresh Issue | 30,599,017 Equity Shares of Rs.10 (totaling up to Rs.443.69 Crore) |
| Face Value | Rs.10 per equity share |
| IPO Price | Rs.135 to Rs.145 per equity share |
| Market Lot | 103 Shares |
| Min Order Quantity | 103 Shares |
| Listing At | BSE, NSE |
Mazagon Dock Shipbuilders Limited IPO Tentative Timetable
| Bid/Offer Launch date | September 29, 2020 |
| Bid/Offer Last date | October 01, 2020 |
| Basis of Allotment finalization date | October 07, 2020 |
| Initiation of Refunds | October 08, 2020 |
| Credit of Shares to Demat Acct | October 09, 2020 |
| IPO Shares Listing Date | October 12, 2020 |
About the Company – Mazagon Dock Shipbuilders Limited
The ‘Ship Builder of the Nation’, Mazagon Dock Shipbuilders Limited is a defense public sector undertaking shipyard that falls under the Department of Defence Production, MoD. It has a maximum shipbuilding and submarine capacity of 40,000 Dead Weight Tonnage.
The company is engaged in the construction and repair of warships and submarines for the MoD for use by the Indian Navy and other vessels for commercial clients. It is a wholly-owned Government of India company and the only shipyard to have built destroyers and conventional submarines for the Indian Navy. Mazagon Dock Shipbuilders Limited also has several workshops with machines and equipment for hull fabrication and constructing ships.
1. Strengths of Mazagon Dock Shipbuilders Limited
- It is the only public sector defense shipyard constructing conventional submarines.
- Mazagon Dock Shipbuilders Limited has world-class infrastructure capable of serving the requirements of the Ministry of Defence.
- Its facilities are located strategically in close proximity to its vendors and customers.
- The company has led to an increase in the indigenization of the vessels and implementation of the “Make in India” campaign.
- It has an experienced board and senior management team with a skillfully trained workforce
2. Objects of the Offer
Mazagon Docks Shipbuilders Limited proposes to utilize the net proceeds from this issue towards funding the following objects:
- To carry out the disinvestment of 30,599,017 Equity Shares by the Selling Shareholder constituting 15.17% of the Company’s pre-Offer paid-up Equity Share capital; and
- Achieve the benefits of listing the Equity Shares on the Stock Exchanges
3. Risk Factors
- The continuing effect of the COVID-19 pandemic on the company’s business and operations is highly uncertain and cannot be predicted.
- Mazagon Docks is primarily dependent on the MoD for defense orders and have mostly been awarded such orders on a nomination basis by the MoD for use by the Indian Navy. There is no assurance that future defense orders will be awarded to it by the MoD. Further, recent changes in the policy framework governing defense procurement and manufacturing in India may result in the company no longer being given such orders which may have an adverse effect on its business growth, financial condition, and results of operations.
- The imposition of liquidated damages and invocation of performance bank guarantees/indemnity bonds by the company’s customers could impact its results of operations and it may face potential liabilities from lawsuits and claims by customers in the future.
- Any decline, delay, or reprioritization of funding under the Indian defense budget or that of customers including the MoD for use by the Indian Navy could adversely affect the company’s ability to grow or maintain its sales, earnings, and cash flow.
- Any delays in procurement, nomination, or any other decision made by the company’s customers and collaborators may result in time and cost overruns in the completion of its shipbuilding and submarine projects. This can have an adverse effect on its business, financial condition, and results of operations.
- The company’s earnings and margins may vary based on the mix of its contracts and programs, performance, and ability to control costs. It may incur losses as a result of cost overruns, time overruns, lack of clarity in standards and specifications, and stringent defense procurement procedures which may have an adverse effect on its business, financial condition, and results of operations.
Important information about Mazagon Dock Shipbuilders Limited
Here is a quick look at some important information about Mazagon Dock Shipbuilders Limited:
1. Overview of Mazagon Dock Shipbuilders Limited’s Financials
| for quarter-ended 31-Mar-20 | for quarter-ended 31-Mar-19 | for quarter-ended 31-Mar-18 | |
| Total Assets | 20,966.02 | 20,847.93 | 19,370.37 |
| Total Income | 5,535.30 | 5,204.67 | 5,027.62 |
| Total Expenses | 4,787.62 | 4,426.55 | 4,377.22 |
| Profit After Tax | 477.05 | 532.47 | 496.17 |
All amounts in INR crores
2. Promoters of Mazagon Dock IPO
The President of India is the promoter of Mazagon Dock Shipbuilders Limited.
Summing Up
In India, the name Mazagon Docks is synonymous with shipbuilding. While the Mazagon Dock Shipyards were established in the 18th Century, the company – Mazagon Dock Limited was registered in 1934. In 1960, it was nationalized and made a public sector undertaking. While many investors are excited about being a part of the growth story of the company, we recommend that you go through the Red Herring Prospectus (RHP) carefully before applying.
Happy Investing!