Mazagon Dock to acquire 51% stake in Colombo Dockyard: How Rs 452 crore deal will strengthen India's foothold in IOR

The proposed acquisition is the first instance of an Indian shipyard, both state-owned and private, acquiring a shipyard overseas. (Courtesy: X | @MazagonDockLtd)

Mazagon Dock Shipbuilders Limited (MDL) announced it's first international acquisition with a controlling and substantial stake of Colombo Dockyard PLC (CDPLC) in an all-cash deal of approximately Rs 452 crore.

The proposed acquisition will enable Mazagon to strengthen its position in the ship repair and shipbuilding industry by unlocking operational synergies, enhancing research development capacities and expanding market reach, the Mumbai-headquartered defence shipyard said in a regulatory filing.

Expected to be completed within 4 to 6 months, the proposed acquisition is the first instance of an Indian shipyard, both state-owned and private, acquiring a shipyard overseas.

"The Board of Directors of Mazagon Dock Shipbuilders Limited inter alia considered and approved the acquisition of a controlling and substantial stake of Colombo Dockyard PLC by way of an investment not exceeding $52.96 million (approximately Rs 452 crore) considering prevailing exchange rate) in the securities of CDPLC through a combination of primary subscription and secondary acquisitions from the shareholders of CDPLC," the warship builder said.

It supports the company's long-term growth vision in the shipbuilding and ship repair industry, Mazagon Dock Shipbuilders added.

Located in the Port of Colombo, CDPLC gives MDL a strategic foothold in the Indian Ocean Region — which is a key maritime corridor. "With this, MDL begins its transformation from a domestic shipbuilder to a regional maritime player with global ambitions," the company posted on its official X account.

🔶#MDL is set to acquire a controlling stake in Colombo Dockyard PLC (CDPLC), Sri Lanka’s largest shipyard, in a deal worth up to USD 52.96 million. This marks MDL’s first international acquisition.Located in the Port of Colombo, CDPLC gives MDL a strategic foothold in the Indian… pic.twitter.com/B6ff1Pq053

— Mazagon Dock Shipbuilders Limited (@MazagonDockLtd) June 27, 2025

Colombo Dockyard PLC is a publicly listed company incorporated under the laws of Sri Lanka. Engaged in the business of shipbuilding and ship repair for over 5 decades, the company is listed on the Colombo Stock Exchange.

How deal will prove beneficial for MDL & India?

According to Captain Jagmohan, chairman & managing director (CMD) of Mazagon Dock Shipbuilders Limited, it is not just an acquisition but a gateway considering Colombo Dockyard's strategic location.

"This is not just an acquisition, it is a gateway. It marks our first international foray and reflects our ambition to transform into a global shipbuilding enterprise. With Colombo Dockyard's strategic location, proven capabilities, and strong regional presence, this step will position MDL as a key player in South Asia and lay the foundation for our emergence as a global shipyard," said Capt Jagmohan.

Echoing the company CMD's words, an MDL spokesperson said that the Colombo Dockyard offers Mazagon Dock a strong operational foothold in the Indian Ocean Region (IOR), which is one of the most significant maritime corridors in the world.

"With this acquisition, MDL positions itself not only to strengthen its presence in the region (IOR) but also to enhance its competitiveness in the global shipbuilding and marine engineering arena," the spokesperson added.

Incorporated on June 14, 1974, Colombo Dockyard has manufactured offshore support vessels, cable-laying ships, tankers, and patrol boats for many countries, including Japan, Norway, France, the UAE, India, and several African nations. "It is the only shipyard in Sri Lanka that offers services ranging from in-house design and construction to advanced repair and marine steel fabrication," the MDL official said.

According to reports, Colombo Dockyard reported losses of LKR 2.48 billion (Rs 70.7 crore) in 2024 and Onomichi Dockyard, which currently controls the company, had sought financial relief from the Japanese and Sri Lankan governments.

The deal with Mazagon Dock Shipbuilders is likely to prove beneficial for Colombo Dockyard. "With MDL’s support, particularly in technology sharing, access to Indian supply chains, and entry into Indian and allied maritime markets, Colombo Dockyard can hope for a financial turnaround and long-term growth," an MDL official told The Times of India.