The shares of Mazagon Dock Shipbuilders crashed nearly 10 percent on April 7, extending losses for the third consecutive session. This sharp selloff in the share price was fuelled after the government announced plans to sell up to 4.83 percent stake in the PSU defence firm at a floor price of Rs 2,525 per share.
Notably, the shares of the Navratna company have now fallen nearly 9 percent below the floor price for the OFS. The defence PSU stock was trading at Rs 2,294 per share in the afternoon.
The sharp selloff in the stock price coincides with the downturn in the overall market. Benchmark indices Sensex and Nifty crashed nearly 4 percent each as US President Donald Trump's reciprocal tariffs stoked recession fears, which rattled global markets.
Mazagon Dock Shipbuilders is currently one of the top losers on the Nifty India Defence index, which itself was down over 6 percent. The shares of the company have so far fallen over 13 percent in the last five sessions. The stock is currently nearly 22 percent lower than its 52-week high level.
The OFS which opened today for retail investors, will see the government selling 1.14 crore equity shares of the company, with a greenshoe option to sell additional 80.67 lakh shares. The share sale of up to 4.83 percent stake at a floor price of Rs 2,525 a piece would fetch about Rs 5,000 crore to the exchequer.
"Government will divest 2.83 percent equity with an additional 2% as green shoe option," DIPAM Secretary Arunish Chawla had said in a post on X last week.
After the OFS opened for retail investors on Monday, Chawla told ET Now, "We kickstarted the year with a bang. We did an OFS in the market for Mazagon Dock. And we lit the spark when there was gloom everywhere. Everyone was focused on what President Trump was doing and everyone was selling short. We surprised everyone with an OFS, and the strategy played off. By the end of the day, we were oversubscribed 142 percent." He further hinted at stake sale in more PSU companies to come soon.
Offer for Sale in Mazagon Dock Shipbuilders Limited (MDL) received enthusiastic response from non-retail investors today.The issue was subscribed 1.42 times of the base size. Government has decided to exercise the green shoe option.Retail investors get to bid on Monday, 7th pic.twitter.com/R5mWhHKU6i
Secretary, DIPAM (@SecyDIPAM) April 4, 2025
In other news, the company's board is set to consider interim dividend payment during its meeting which is scheduled to be held tomorrow (April 8).
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