Mazagon Dock Shares Sink 14% in 2 Sessions as Govt Upsizes OFS

The government is going ahead with its Offer For Sale (OFS) for Mazagon Dock Shipbuilders Limited and as a result the company's stock has fallen sharply, with losses extending over the last two trading sessions. Shares of the state-run defence company dropped as much as 9% on Monday, Apr 7, 2025, and earlier hit an intraday low of ₹2,207.30 on the BSE, down 13%. This comes after a 7% drop the previous Friday.

The decline in the share price comes as the government plans to sell some of its stake in the shipbuilder through an OFS. It had planned to sell as much as 4.83%, but the government then said it would exercise the oversubscription option, raising the overall offer size to 4.01%. This includes 1.14 crore shares as the base issue along with another 47.69 lakh shares.

The market price has now come close to the floor price of the OFS, which was set at ₹2,525 per share. This comes despite the non-retail book of the OFS being oversubscribed 1.4 times, as per reports. Today, retail investors were able to apply for shares.

This recent drop greatly affected the stock's performance, negating previous gains seen throughout the last month. Over the past two sessions, the stock has declined by a cumulative 14.14%, while the broader shipbuilding industry index has fallen by 6.02% in the same period.

Despite the current headwinds, Mazagon Dock Shipbuilders has demonstrated significant strength over a longer timeframe. It has rallied 8.06% in the last three months and a massive 114.08% in the last one year, hugely beating the Sensex, which fell in the same timeframe. Additionally, the stock continues to ride above its 50-day, 100-day, and 200-day moving averages, while recently trading below its 5-day and 20-day ranges.

The government held 84.8% shareholding in Mazagon Dock Shipbuilders at the end of the December quarter. Even after the stake sale of 4.01% via OFS, the government will control close to 80% ownership, which is more than the mandated Minimum Public Shareholding norms.

Analysts’ sentiment on the stock seems to be mixed. Six analysts track Mazagon Dock Shipbuilders, with four recommendations to "buy," and one each to "hold" and "sell," according to one report.

In conclusion, Mazagon Dock Shipbuilders is currently navigating a period of share price weakness, primarily influenced by the ongoing government OFS and the subsequent increase in the offer size. While short-term market dynamics exert downward pressure, the company's robust long-term performance and significant government holding continue to be noteworthy factors in the future.

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