Public sector undertaking defence company Mazagon Dock Shipbuilders is set to debut on bourses on October 12 after the stellar IPO subscription a week ago. The issue price has been fixed at Rs 145 at the higher end of the price band.
Given its strong orderbook, stable business and a reasonable valuation, it is still expected to be a bumper listing with at least more than 50 percent gains over its issue price, though the premium has been reduced from around 100 percent, experts feel.
Mazagon was trading at around 125-145 per share premium in the grey market during the issue opening period, which then reduced to around Rs 100 now, people familiar with IPO development told Moneycontrol.
"We are expecting strong listing gain due to lower valuation and strong order book compared to Garden Reach Shipbuilders. On the day of listing, the stock will open at 60-70 percent higher price (mainly valuation gap with peers)," Amarjeet Maurya, AVP - Mid Caps, Angel Broking told Moneycontrol.
Astha Jain, Senior Research Analyst at Hem Securities expects Mazagon to list at premium of 50-60 percent above issue price due to stable business & reasonable valuation.
The Rs 444-crore initial public offering of the defence company was subscribed 157.4 times during September 29-October 1, the highest subscription by an IPO in the current calendar year.
Incorporated in 1934, Mazgaon Dock Shipbuilders being the only public sector defence shipyard constructing conventional submarines has world-class infrastructure. It constructs and repairs warships and conventional submarines for the Ministry of Defence (MoD) for the Indian Navy, besides vessels for commercial clients.
Company has a production capacity of 40,000 DWT, with two segments shipbuilding (naval shipbuilding/repairs) and submarine/heavy engineering.
As of July 2020, company's order book for shipbuilding and submarines and heavy engineering was Rs 54,074 crore comprising of three major shipbuilding projects and two submarine projects.
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