Mazagon Dock Shipbuilder Ltd.’s IPO will hit the market on September 29. The shipbuilder is a leading public sector undertaking under the Ministry Of Defense. The government is considering diluting a 10 to 15 percent stake in the shipbuilding company with a maiden public offering. The announcement came amid a slew of IPOs that has hit the market in the last few months. The firm filed for SEBI approval in August and received regulator’s go ahead. The shipbuilder was supposed to launch initial public offers in 2019 but shelved the proposal after receiving only a lukewarm response from investors.
Once Mazagon Dock IPO hits the market, it will be the eleventh company to float maiden public offers this year and the first public sector unit.
This year so far has been the worst year for the Indian IPO market in four years. After rallying for the last two years, this year experienced a slowdown in initial public offers due to the outbreak of the COVID-19 pandemic. In 2019, twenty-seven companies launched IPO offers, but the number is only eleven in 2020. However, after several months of inaction, the IPO market is experiencing high activities in September. The coming months will see more companies, ranging from pharma to information technology and jewellery firms, taking the primary market route to meet capital requirements.
Mazagon Dock Shipbuilders IPO will hit the market on September 29, along with UTI AMC IPO.
Mazagon Dock is a pubic sector shipbuilding unit under the control of MoD. The company is India’s only shipbuilder with a credit to build destroyers and conventional submarines for the Navy and one of the firsts to build Corvettes.
Since its incorporation in 1934, Mazagon Dock has build 795 vessels, including 25 warships, missile boats, frigates, and submarines. The maximum production capacity of the shipbuilder stands at 400,000 DWT as per the CRISIL report. Mazagon Dock was conferred Mini-Ratna-1 status in 2006.
Mazagon Dock IPO will open for a size of Rs 400-500 crores, which is lower than the initially assumed volume of Rs 700-800 crores. The other important details regarding the offer are mentioned below.
- The important Mazagon Dock IPO opening dates to note are the opening date on September 29 and the closing date on October 1
- The offer will list in both BSE and NSE
- The IPO size will contain 30,599,017 fresh scrips at face value of Rs 10
- Finalisation of Basis of Allotment will happen on October 7, and the tentative date for final IPO listing is October 12
- In FY 2020, company profit was Rs 415 crores on revenue of Rs 5,566 crores
Should You Subscribe for IPOs?
IPOs are critical for any financial market. Companies launch initial public offers as a way to raise public funds for business investment. Once a company lists with the bourses, its shares become available for trading in the secondary market. For investors, IPO offers long-term investment opportunities. Of course, not all the IPOs that hit the market are worth your attention, but they certainly carry some merits which make them desirable to investors. Here is why you need IPOs in your portfolio.
IPO promises early entry into the market. You can buy initial stakes in a company with high growth potential, in which case it means rapid profit in a short time.
Investing in IPOs is close to investing in equities – your return from investment grows in the long run as the company grows in the future.
IPOs allow you to buy cheap. As compared to the share prices of trading companies, IPOs are more affordable investment options, as the promoters try to test the market. It allows you to take an early price advantage. So, when the company grows in the future, you gain by a massive margin.
Miraculous IPO successes aren’t unheard of. From Amazon to Visa International, several big companies of today made a hit with successful IPO launches.
The Indian economy is currently hit by the worst recession ever. But amid all these negativity, investors’ interest in fresh IPO launches is undoubtedly a positive factor. After the Happiest Minds hit the jackpot with their IPO offers, Route Mobile, Chemcon Chemicals, and CAMS IPOs have also received a bumper response from investors.
You can subscribe to Mazagon Dock IPOs via ASBA available in your bank account, or you can log in to your Angel Broking console to find the list of new IPOS. The IPO subscription forms are also available with NSE and BSE.