The Centre is looking at divesting up to 5.04% stake or over 1.32 million of its shares in the shipbuilder as part of this disinvestment exercise.
At the end of the March quarter, the government held 67.91% stake in Cochin Shipyard. Meanwhile, retail and high net worth individuals, held 19.66% and 0.73% stake in the company.
Cochin Shipyard’s Offer For Sale, which was open for Non-retail investors on Tuesday, was oversubscribed 3.52 times, leading to the government announcing that it will be exercising the entire greenshoe option to sell another 2.5% stake in the shipbuilder.
The Centre had initially sought to sell 2.52% stake, equivalent to 66.29 lakh shares, in the company.
The indicative price for the bids is ₹1,401.85 per share, against the set floor price of ₹1,400 per share. The 5.04% stake sale at the set floor price is expected to fetch around ₹1,800 crore for the Centre.
Here’s how retail investors can apply
Retail investors can place their bids via the OFS section on their trading platform or broker’s app.
Investors should review the issue details such as the floor price, bid quantity, among others, prior to placing their bids. The bid price should either be equal to or higher than the set floor price of ₹1,400 apiece.
Investors should hold sufficient funds in the trading account as the amount would be blocked till the allotment process is done.
Successful applicants will see the shares reflect in their demat accounts on the settlement date, while unsuccessful bidders will get a refund as the blocked funds would be released.
Centre’s divestment drive
With Cochin Shipyard, the government continues its disinvestment drive. Since May 21, the government has raised over ₹20,000 crore via a series of OFS’. In June, the government carried out Offer For Sale transactions in companies such as Coal India, NLC India, NHPC, IRFC, GIC and others.
The Centre has exercised the greenshoe option in all the OFS it launched this year, so far.
Stock reaction
Shares of Cochin Shipyard ended the previous session 5% lower at ₹1,430.7 apiece. The stock has declined 11.8% this year, so far.
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