The Ministry of Ports, Shipping and Waterways, Government of India, has announced an offer for sale (OFS) of equity shares in Cochin Shipyard Limited (CSL). The President of India, acting through the Ministry, plans to divest up to 5% of the total paid-up equity capital of the company, equivalent to 1.31 crore equity shares.
The base offer size includes 65,77,020 equity shares, representing 2.5% of the company’s equity. There is also an oversubscription option for an additional 2.5%, taking the total to 5%. The offer will be executed on the stock exchanges via a separate window on October 16, 2024 (for non-retail investors) and October 17, 2024 (for retail investors, employees, and un-allotted bids from non-retail investors).
The floor price for the OFS has been set at ₹1,540 per share, with no discount for retail investors. Eligible employees may apply for equity shares worth up to ₹2 lakh, with 25,000 shares reserved for them, constituting 0.19% of the offer size.
The government aims to raise substantial capital through this stake sale in Cochin Shipyard, providing investors the opportunity to invest in a prominent public sector shipbuilding and maintenance company. The allocation will be made on a price-priority basis for non-retail investors, while retail investors may bid at the cut-off price.
The offer is being managed by brokers including DAM Capital Advisors, Axis Capital, and BOB Capital Markets. The shares will be available for trading on both BSE and NSE.
Investors are required to comply with the Offer for Sale (OFS) guidelines issued by SEBI, which governs the sale of shares through stock exchange mechanisms. The settlement for non-retail investors who place bids on October 16 will take place on October 17, while settlement for bids placed by retail investors and employees on October 17 will occur on October 18.
The move is part of the government’s larger divestment plan to raise funds by reducing its stake in public sector enterprises while enhancing market participation in such companies.
This OFS allows institutional and retail investors to acquire shares in one of India’s leading shipbuilders, which plays a critical role in India’s maritime defense capabilities and commercial shipbuilding activities.