Mazagon Dock Shipbuilders lists at nearly 50% premium on the exchange today

Mazagon Dock Shipbuilders IPO listing: The company began trading today on stock exchanges at Rs 214.9, which is a 48% premium to its issue price of Rs 145 per share. Mazagon Dock shares rose as high as Rs 216.95 in the early minutes of trade. At a current market price of Rs 190 the company is available at a market cap of Rs 3800 cr.

The Rs 444 crore IPO of Mazagon Dock had received a strong response from investors with the issue being subscribed 157.4 times. The IPO received an offer for 4,81,64,59,117 shares against 3,05,99,017 shares. The HNI portion for Mazagon Dock IPO was subscribed close to 679 times while QIB and retail portion were subscribed 89.7 times and 35.6 times respectively.

According to Zee Business Managing Editor Anil Singhvi, long term investors should remain invested in the stock.  

Mazagon Dock Shipbuilders is engaged in construction and repair of warships and submarines for use by the Indian Navy and other vessels for commercial clients, according to the red herring prospectus.

The company, which received the 'Miniratna' status in 2006, is the only shipyard to have built destroyers and conventional submarines for the Indian Navy. Mazagon Dock Shipbuilders posted a net profit of ₹477 crore, including the share of its associate company Goa Shipyard, on a revenue of ₹5,535 core in the fiscal year 2019-20.
Many brokerages had recommended subscribing to the offer, citing attractive valuation, strong order book and new defence procurement policy that is expected to accelerate indigenization. Garden Reach Shipbuilders and Engineers was the last shipbuilding PSU Company to list on the exchanges in 2018. Prior to that, Cochin Shipyard got listed in 2017.

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Yes Securities, Axis Capital, Edelweiss Financial Services, DAM Capital Advisors and JM Financial are the managers to the offer.

(Authored by Rahul Kamdar)