India’s largest public sector shipyard in terms of dock capacity, Cochin Shipyard has announced that its IPO will open on August 1, 2017 with price band of Rs. 424 – Rs. 432 per equity share of the Company each of face value of Rs. 10 each.
The IPO consists of 33,984,000 Equity Shares of face value of Rs 10 each. The Issue consists of a fresh Issue of 22,656,000 Equity Shares and an Offer for Sale of 11,328,000 Equity Shares by the President of India acting through the Ministry of Shipping. Bids can be made for a minimum of 30 Equity Shares and in multiples of 30 Equity Shares thereafter.
The Floor Price is 42.4 times of the face value and the Cap Price is 43.2 times of the face value. The Issue and the net Issue will constitute 25% and 24.39% respectively, of the post Issue paid-up equity share capital of the Company.
The Company proposes to utilize the Net Proceeds of the Issue for (i) Setting up of a new dry dock within the existing premises of the Company (“Dry Dock”), (ii) Setting up of an international ship repair facility at Cochin Port Trust area (“ISRF”) and (iii) General corporate purposes.
Incidentally, as of May 31, 2017, the Company has two docks – dock number one, primarily used for ship repair (“Ship Repair Dock”) and dock number two, primarily used for shipbuilding (“Shipbuilding Dock”). Their Ship Repair Dock is one of the largest in India and enables them to accommodate vessels with a maximum capacity of 125,000 DWT. Their Shipbuilding Dock can accommodate vessels with a maximum capacity of 110,000 DWT (Source: CRISIL Report).
The Company is in the process of constructing a new dock, a ‘stepped’ dry dock (“Dry Dock”). This stepped dock will enable longer vessels to fill the length of the dock and wider, shorter vessels and rigs to be built or repaired at the wider part. The Company is also in the process of setting up an International Ship Repair Facility (“ISRF”), which includes setting up a shiplift and transfer system.
In the last two decades, the Company has built and delivered vessels across broad classifications including bulk carriers, tankers, Platform Supply Vessels (“PSVs”), Anchor Handling Tug Supply vessels (“AHTSs”), barges, bollard pull tugs, passenger vessels and Fast Patrol Vessels (“FPVs”). The Company is currently building India’s first Indigenous Aircraft Carrier (“IAC”) for the Indian Navy. They have also grown their ship repair operations and are the only commercial shipyard to have undertaken repair work of Indian Navy’s aircraft carriers, the INS Viraat and INS Vikramaditya.
Cochin Shipyard was incorporated in the year 1972 as a fully owned Government of India company. In the last three decades the company has emerged as a forerunner in the Indian Shipbuilding & Shiprepair industry. This yard can build and repair the largest vessels in India. It can build ships upto 1,10,000 DWT and repair ships upto 1,25,000 DWT. The yard has delivered two of India’s largest double hull Aframax tankers each of 95,000 DWT . CSL has secured shipbuilding orders from internationally renowned companies from Europe & Middle East and is nominated to build the country’s first indigenous Air Defense Ship. Shipyard commenced ship repair operations in the year 1982 and has undertaken repairs of all types of ships including upgradation of ships of oil exploration industry as well as periodical lay up repairs and life extension of ships of Navy, UTL, Coast Guard, Fisheries and Port Trust besides merchant ships of SCI & ONGC. The yard has, over the years, developed adequate capabilities to handle complex and sophisticated repair jobs. The Shipyard also trains graduate engineers to marine engineers who later join ships both Indian and foreign as 5th Engineers. 100 are trained every year.