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RHP Mazagon Dock Shipbuilders Limited will be opening its initial public offering for subscription on September 29, 2020 and will close on October 1, 2020 with a total issue size of ₹444cr (Initial public offering of 30,599,017 equity shares of face value of Rs.10 each) at a price band of ₹135 – ₹145 per Equity Share. The Offer is being made through book building process in accordance with regulation 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957 and regulation 31 of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended where allocation to QIBs is not more than 50% of the Net Offer, Non-Institutional Bidders is not less than 15% of the Net Offer and Retail Individual Bidders is not less than 35% of the Net Offer. The objects of the Offer are to carry out the disinvestment of 30,599,017 Equity Shares by the Selling Shareholder constituting 15.17% of our Company’s pre-Offer paid up Equity Share capital. Issue Proceeds will go to the president of India, acting through the ministry of defense, Government of India (the Selling Shareholder). Company Overview - Mazagon Dock Shipbuilders Limited, a wholly owned GoI company that was incorporated in 1934. India’s only shipyard to have built destroyers and conventional submarines for the Indian Navy (Source: CRISIL Report). Primarily operating in Shipbuilding Division that undertakes building and and repairing naval ships along with Submarine division that building, repairing, and refitting of diesel electric submarines. Mazagon Dock shipyard is strategically located on the west coast of India, the sea route that connects Europe, Pacific Rim, and West Asia. Company Promoters: The President of India acting through the Ministry of Defence, GoI is the promoter of the company. .
Company
Mazagon Dock Shipbuilders Ltd
Issue Type
(Book Built Portion)
Issue Size (In ` Crore)
444
Lot Size
103 Equity shares
Open Date
29 Sep
Close Date
01 Oct
Offer Price
Rs.135-145
RHP
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Consolidated Rs Cr
FY17
FY18
FY19
FY20
Revenue
3,519
4,470
4,614
4,978
EBITDA (%)
3.6
3.5
5.7
5.4
Adj EPS (Rs)
29.7
24.6
26.4
24.1
PE(x)
4.9
5.9
5.5
6.0
ROE (%)
40.0
17.0
17.6
15.5
Key Points
MDL is one of the few shipyards under the MoD that only makes warships at the moment and is the only shipyard to have built destroyers and conventional submarines for the Indian Navy. MDL is also one of the initial shipyards to have built Corvettes in India. We believe that its strong pedigree in making warships & conventional submarines are likely to provide an upper hand in garnering additional orders like Project P-75I where it has cleared all benchmarks. Indian Maritime security has been garnering significant attention in the past decade and geopolitical tensions with China (growing military presence in the Indian ocean) are likely to result in steady fleet and submarine additions.
MDL’s order book is likely to be executable over 6-7 years which even without considering order inflows provides strong revenue visibility. It has sufficient capacity in place and is exploring additional development which can help cater to any uptick in orders. MDL intends to increase its ship repair revenues from ~3% of overall revenues (FY20) to 15-20% gradually which bodes well from profitability perspective. Increasing retention of cost savings and potential ~50bps increase in margins under revised acquisition procedures are key margin drivers.
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Mazagon Dock Shipbuilders Ltd IPO Note
Mazagon Dock Shipbuilders Ltd is coming out with an IPO which opens on Sept 29, Read this IPO note to know more details about Mazagon Dock Shipbuilders Ltd IPO Read More
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