Cochin Shipyard OFS Raises ₹2,900 Crore

The government's Offer for Sale (OFS) in Cochin Shipyard Ltd (CSL) received a strong response from institutional investors on Tuesday, with bids worth over ₹2,900 crore being placed on the first day. This led to an oversubscription of the institutional portion, prompting the government to exercise the entire green shoe option.

The OFS, which is part of the government's broader disinvestment programme, aims to sell up to 5.04 percent stake in Cochin Shipyard. The issue consists of a base offer of 2.52 percent equity and an additional 2.52 percent green shoe option. According to stock exchange data, non-retail investors bid for over 2.10 crore shares, compared with around 59.66 lakh shares offered to them under the base issue.

Department of Investment and Public Asset Management (DIPAM) Secretary Arunish Chawla stated that the OFS was oversubscribed 3.52 times on the first day, reflecting strong investor interest in the PSU shipbuilder. The floor price has been fixed at ₹1,400 per share, nearly 7 percent lower than Monday's closing price of ₹1,504.75. If the entire 5.04 percent stake is sold at the floor price, the government is expected to raise around ₹1,800 crore.

Despite the strong institutional demand, Cochin Shipyard shares ended Tuesday's session 3.75 percent lower at ₹1,448.30 on the stock exchange. The government currently owns 67.91 percent of the company. Retail investors can participate in the OFS on July 8.

The Cochin Shipyard OFS is a significant step towards achieving the government's target of ₹80,000 crore through PSU disinvestment and asset monetisation for the full financial year. So far in FY27, the Centre has raised ₹18,561 crore through stake sales in six public sector companies, including Central Bank of India, Coal India, NHPC, NLC India, GIC, and IRFC.

The success of the Cochin Shipyard OFS is expected to have a positive impact on the government's disinvestment programme, which aims to raise funds for various development projects and initiatives. The strong demand from institutional investors is a testament to the confidence in the PSU shipbuilder and the government's efforts to divest its stake in the company.

As the disinvestment programme continues, the government is expected to announce more stake sales in public sector companies. The Cochin Shipyard OFS is a significant milestone in this programme, and its success is likely to pave the way for future disinvestments. With the government aiming to raise ₹80,000 crore through PSU disinvestment and asset monetisation, the Cochin Shipyard OFS is an important step towards achieving this goal.

In conclusion, the Cochin Shipyard OFS has received a strong response from institutional investors, with bids worth over ₹2,900 crore being placed on the first day. The government's decision to exercise the entire green shoe option is a testament to the confidence in the PSU shipbuilder and the disinvestment programme. As the programme continues, the government is expected to announce more stake sales in public sector companies, with the aim of raising ₹80,000 crore through PSU disinvestment and asset monetisation.