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Stellar Listing: Mazagon Dock Shipbuilders debuts at Rs 216, a 49% premium

The bumper listing was in line with analysts' expectations given company's strong orderbook position, attractive valuations and hefty IPO subscription.

October 12, 2020 / 06:22 PM IST

Mazagon Dock Shipbuilders, the country's largest defence company, started off the first day trade with a whopping 49 percent premium on October 12.

The stock opened at Rs 216.25 on the BSE, up by Rs 71.25 compared to issue price of Rs 145 per share.

On the NSE, it kicked off trading at Rs 214.95, a 48.21 percent premium of over IPO price.

The stock cooled off a bit from its opening price but still remained strong. At 10:03 hours IST, it was trading at Rs 182.25, up 25.69 percent with volumes of 11,21,858 shares on the BSE.

On the NSE, it was quoting at Rs 182.70, up 26 percent with volume 1,10,11,963 equity shares on the National Stock Exchange.

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The bumper listing was in line with analyst expectations given the company's strong orderbook, attractive valuations and hefty IPO subscription.

Mazagon Dock Shipbuilders raised around Rs 443 crore via public issue, which was subscribed 157.4 times during September 29-October 1.

As it was an offer for sale by the government, the company will not receive any money from the IPO.

Mazagon Dock Shipbuilders, having a maximum shipbuilding and submarine capacity of 40,000 Dead weight tonnage (DWT), is engaged in the construction and repair of warships and submarines for the Ministry of Defence for use by the Indian Navy and other vessels for commercial clients. It is the only shipyard in India to have built destroyers and conventional submarines for the Indian Navy.

"We believe the company is well placed as it's the only public sector player for manufacturing defence submarines, strong and experienced management, infrastructure capabilities to fulfil requirements and lastly Mazagon Dock is strategically located in Mumbai thus this gives a competitive advantage over its peers. Besides it has strong financial as well as order book which would help it to further strengthen its position in the long run," Religare Broking said.

Recently, the government has taken steps to ban 101 defence items, which clearly indicates government's focus on indigenization to promote and create big opportunities in Indian defence sector.

Going ahead, it would be beneficial for companies like Mazagon Dock, Amarjeet Maurya, AVP - Mid Caps at Angel Broking told Moneycontrol.

As on July 2020, company had an order book of Rs 54,074 crore which is to be executed in next 6-7 years.



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Moneycontrol News
first published: Oct 12, 2020 10:00 am
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