Cochin Shipyard shares dropped around 3% on Monday following reports of a potential government Offer for Sale (OFS) at a discount. According to The Economic Times, the company's shares plunged to ₹1,418 apiece on NSE during afternoon trading hours as buzz around the stake sale by the company's largest promoter may have dampened investor sentiment. The proposed transaction is expected to be launched at a discount of around 6-8% to the current market price, as reported by CNBC TV18.
According to sources reported by CNBC TV18, the Central government is planning to launch an Offer for Sale (OFS) in Cochin Shipyard Ltd. The proposed transaction is expected to be launched at a discount of around 6-8% to the current market price. The government currently holds a 67.91% stake in the state-run shipbuilder, making further stake dilution necessary to meet regulatory requirements.
As per the company's March quarter shareholding pattern filed with the BSE, the government's stake is below the 75% level required to meet minimum public shareholding norms. This regulatory requirement makes the proposed stake sale necessary for Cochin Shipyard to maintain compliance with SEBI regulations governing public sector undertakings.
The proposed stake sale is part of the government's ongoing disinvestment programme aimed at raising resources through OFSs in public sector undertakings. According to CNBC TV18, since May 21, the government has raised more than ₹16,000 crore through a series of OFSs. Recently, the government offloaded stakes in Coal India, NHPC, NLC India, General Insurance Corporation of India (GIC) and other PSU companies, as reported by The Economic Times.
Despite the recent stock decline, Cochin Shipyard has delivered impressive long-term returns of 391% over three years and 601% over five years. The company maintains a market capitalisation of ₹37,699 crore. In its latest earnings report, the company showed strong operational efficiency with EBITDA rising 16.5% to ₹310 crore from ₹266 crore in Q4FY25, while EBITDA margin expanded significantly to 20.9% from 15.1% a year earlier, reflecting tighter cost controls and improved operational efficiency.
