The Central administration has announced its intention to divest a 5% stake in Cochin Shipyard Ltd through an Offer for Sale (OFS), with the minimum share price set at ₹1,540. The OFS is scheduled to open on October 16, 2024, exclusively for non-retail investors, while retail investors will have the opportunity to participate starting October 17. This strategic move will feature a base offer of 2.5%, with an additional 2.5% available through a green shoe option.
As of September 30, the government held a substantial 72.86% stake in Cochin Shipyard. The decision to divest comes on the heels of impressive financial results from the company. For the quarter ending June 30, 2024, Cochin Shipyard reported a remarkable 76.5% year-on-year increase in net profit, which surged to ₹174.2 crore, compared to ₹98.7 crore during the same quarter last year. The company’s revenue from operations also experienced a significant boost of 61.1%, climbing to ₹771.5 crore from ₹475.9 crore in the previous fiscal year.
Cochin Shipyard’s operational metrics reflect robust growth, with Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) more than doubling—an impressive 125% increase to ₹177.3 crore. The EBITDA margin improved significantly to 23% for the reporting quarter, up from 16.5% in the corresponding period of the prior fiscal year.
The company’s growth has been largely driven by its Ship Building segment, which saw revenue rise by 62% to ₹527 crore, accounting for 68% of overall revenue. The Ship Repair segment, responsible for 32% of total sales, also reported a substantial revenue increase of 63%, reaching ₹245 crore, with margins rising to 43% from 24% in the previous year. As of Tuesday’s market close, Cochin Shipyard’s shares are down 44% from their peak of ₹2,977, achieved in July. However, the stock remains up fourfold from its initial public offering (IPO) price of ₹432, showcasing its long-term growth potential despite recent fluctuations.
