Mazagon Dock had debuted on the bourses in October 2020 at an IPO price of ₹145 per share. From its IPO price, the stock has gained over 3,000% in less than four years of listing.
Mazagon dock is a state-run shipbuilder with the government of India holding majority stake.
A report from Moneycontrol on June 28 stated that the central government is looking at selling small stakes in select state-run companies and Mazagon Dock was part of that list. Moneycontrol cited senior government officials for this piece of information.
As of the March quarter, the government held an 84.8% stake in Mazagon Dock. In order to be compliant with the Minimum Public Shareholding norms, the government will have to sell its excess 9.8% stake to bring its shareholding down to 75%. However, the quantum which the government plans to sell in these PSUs is not specified.
The report further stated that the discussiosn for an Offer for Sale in Mazagon Dock have been ongoing with the Defence Ministry since last year but the ministry has some reservations for the OFS, which are currently being resolved, sources had told Moneycontrol.
Mazagon Dock currently has 20 crore outstanding shares. In case the government plans to sell around 9.8% stake, it would amount to 1.97 crore shares of the company.
Assuming that the government plans on selling this entire 9.8% stake at Wednesday’s high of ₹4,650, it would fetch them a total amount of nearly ₹9,200 crore. Just to clarify, these are just calculations based on the data available and no official announcement from the government regarding an Offer for Sale in Mazagon Dock has been made yet.
Despite this surge, brokerage firm ICICI Securities had issued a “sell” recommendation on the stock earlier in June with a price target of ₹900.
Shares of Mazagon Dock Shipbuilders are trading 6.8% higher at ₹4,590. The stock has already risen 40% in the last one month.
