Mazagon Dock OFS: Government Exercises Oversubscription To Sell 1.18% More Stake

The government on Friday confirmed that it would be exercising the oversubscription option to sell an additional 1.18% stake in Mazagon Dock Shipbuilders Ltd. via the offer for sale it launched earlier in the day, an exchange filing showed. This takes the overall offer size to 4.01%.

Under the oversubscription option, the government would be selling 47.69 lakh additional shares through the OFS. This is in addition to the 1.14 crore shares, representing 2.83% stake, offered for sale under the base offer.

The share sale commenced on Friday for non-retail investors and will continue on Monday for retail investors, employees, and non-retail investors carrying forward unallotted bids. The floor price for the sale was set at Rs 2,525 per share.

Earlier, on Thursday, the state-run firm had stated that the government may sell up 80.67 lakh additional shares or 2% stake through the oversubscription option. However, it has ended up exercising the option to offer 1.18% stake for sale.

"Accordingly, the total offer size will be up to 1,61,80,354 Equity Shares (representing 4.01% of the total paid up equity share capital of the Company) of which 16,18,036 i.e. 10% of the Offer, would be available for Retail Category on T+1 day, i.e. April 7, 2025," the regulatory filing stated.

The Union government holds an 84.83% stake in company as of the December quarter, according to data available on the BSE.

Mazagon Dock Shipbuilders, under the Ministry of Defence, is a key shipbuilding company catering to the Indian Navy and commercial maritime sector.

Shares of the company on Friday closed 7.14% lower at Rs 2,542.20 apiece on the NSE, compared to a 1.49% decline in the benchmark Nifty. The stock has risen 131.61% in the last 12 months and 12.80% on a year-to-date basis.

Four out of the six analysts tracking Mazagon Dock have a 'buy' rating on the stock, one recommends 'hold' and another suggests 'sell', according to Bloomberg data. The 12-month analysts' price targets implies a potential downside of 6.8%.