Mazagon Dock Shipbuilders Limited IPO Review

29 Sep 2020  Read 381 Views

Have you ever been to a casino? The environment in casinos, especially in western countries is super exciting and happening. The crowd, drinks, games, music, shouts of excitement on making money or losing money and so much more! Casinos have their own charisma and style. 

However, Casinos in India are not a grand success and have only 11 cities where they are legal. Even though the gambling of money is not very successful and mostly illegal in India, there is still a place where it is completely legal and also popular to take some chances on your money. And that place is the stock market!

Stock marketing is becoming a popular trading platform in the country; with people increasingly becoming aware of the markets and money matters. In the year 2020, the pandemic disrupted a lot of economic activities; jobs, sources of income were lost. This is why a lot of people tried their hands at stock marketing for the first time this year. 

This is the reason why a lot of the IPOs released this year, performed exceptionally well and garnered a lot of subscribers.

Another company hoping for a similar success is Mazagon Dock Shipbuilders Ltd. Yes, the  Mazagon Dock Shipbuilders Ltd IPO is all set to open today. Let us just sneak in and have a greater insight into this whole scenario. 

A Brief About Mazagon dock shipbuilders

Mazagon Dock Shipbuilders Ltd. is engaged in the business of constructing and preparing warships and submarines for the MoD and other types of vessels which include cargo ships, multi-purpose support vessels, water tankers, tugs, dredgers, barges, and border outposts, etc. for commercial clients. Mazagon Dock Shipbuilders Ltd. builds conventional submarines and destroyers which are to be supplied to the Indian Navy.

The shipyard of Mazagon Dock Shipbuilders Ltd. is located on the west coast of India; it is the sea route that connects the Pacific rim, Europe, and West Asia. The shipbuilding division and heavy engineering division are the 2 key operating divisions of the business.

The shipbuilding division undertakes the work of building and repairing naval ships. On the other hand, the heavy engineering division includes building, repairing and refitting of diesel-electric submarines. 

Till the date, Mazagon Dock Shipbuilders Ltd. Has successfully built 795 vessels, including 25 warships, 4 missile boats, 3 submarines, 3 Godavari class frigates, 6 Leander class frigates, 3 Shivalik class frigates, 6 destroyers, and 3 Corvette. 

Promoters Of Mazagon Dock Shipbuilders Ltd.

The President of India acting through the Ministry of Defence of the Government of India,  is the promoter of the company. 

Have a quick look at the below-mentioned points to have a deeper insight into the competitive strengths of Mazagon Dock Shipbuilders Ltd. 

  • It is India's leading public sector defence shipyard company.

  • Strong order book and financial position.

  • It has a strategic location at Mumbai on the west coast of India.

  • World-class infrastructure facilities.

Financial Analysis Of Mazagon Dock Shipbuilders Ltd.

To have a closer understanding of the company profile of Mazagon Dock Shipbuilders Ltd., let's have a look at some of the important financial figures of the company over the past few years. 

Particulars

For the year/period ended (₹ in million)

 

31-Mar-20

31-Mar-19

31-Mar-18

31-Mar-17

Total Assets

209,660.28

208,479.34

193,703.72

193,911.65

Total Revenue

55,353.07

52,046.74

50,276.29

42,748.63

Profit After Tax

4,770.59

5,324.74

4,961.73

5,982.58

Details Of Mazagon Dock Shipbuilders Limited IPO

Like the other IPOs which have opened recently, Mazagon Dock Shipbuilders Ltd.'s IPO is also a catchy one and is among the much sought-after IPOs. Refer to the table below to know everything about this upcoming IPO:

IPO Date

Sep 29, 2020 - Oct 1, 2020

Issue Type

Book Built Issue IPO

Issue Size

30,599,017 Eq Shares of ₹10
(aggregating up to ₹443.69 Cr)

Offer for Sale

30,599,017 Eq Shares of ₹10
(aggregating up to ₹443.69 Cr)

Face Value

₹10 per equity share

IPO Price

₹135 to ₹145 per equity share

Market Lot

103 Shares

Min Order Quantity

103 Shares

Listing At

BSE, NSE

Mazagon Dock shipbuilders IPO Lot Size and Price

Application

Lots

Shares

Amount (Cut-off)

Minimum

1

103

₹14,935

Maximum

13

1339

₹194,155

Mazagon Dock Shipbuilders IPO Promoter Holding

Pre Issue ShareHolding

100%

Post Issue Shareholding

85%

The objective of the Issue

Let us now put a light on the objectives of Mazagon Dock Shipbuilders Ltd. behind issuing this IPO:

  • The net proceeds will be used to carry out the disinvestment plan of 30,599,017 equity shares by selling shareholders constitutes 15.17% of pre-offer equity share capital. 

  • To achieve the benefits of share listing of the stock exchanges.

Mazagon Dock Shipbuilders IPO Dates

The market enthusiasts must be aware that Mazagon Dock Shipbuilders Ltd. has the same date of opening and closing as Likhitha Infrastructure Ltd and UTI AMC. So their finalization of the basis of allotment, initiation of refunds, and listing dates, also go hand in hand. 

The finalization on the basis of allotment will be done on 7 October 2020, initiation of refunds on 8 October 2020, credit of shares to delay account is scheduled on 9 October 2020, and finally, the listing of IPO shares will be done on 12 October 2020. 

So if you are planning to subscribe to the Mazagon Dock Shipbuilders Ltd. IPO, then these are the dates that you must write in your diaries.

What Analysts Have to Say?

A positive thing for the domestic defence industry is that the new defence procurement policy 2020 is expected to accelerate indigenization.

"At the upper price band of Rs.145, Mazagon Dock Shipbuilders is available at a P/E of 6.1x, which is a significant discount to its peers. Considering strong technological & execution capabilities, healthy order book, and attractive dividend yield, we assign a subscribe rating for this IPO," Geojit Financial Services said. 

According to LKP securities, it would be a worthy decision to subscribe to Mazagon Dock Shipbuilders Ltd. These days "At the higher price band of ₹145, the stock is valued at 6.7x FY20 earnings of ₹21.4, which looks quite attractive considering its healthy order book, long term visibility of top-line growth, competitive edge, profitability, return ratios and dividend payout policy. We recommend investors to subscribe."

Also, there are various other experts who say that it will be a wise decision and a decent pick if one decides to subscribe to the IPO of Mazagon Dock Shipbuilders Ltd.

Final Thought

As said earlier, IPOs are fun if one has a clear mindset and careful thinking before subscribing to them. A decent choice among the pool of options is the only requirement to jump into this casino. 

Mazagon Dock Shipbuilders Ltd. IPO is another big opportunity for market enthusiasts out there. So, make your analysis, ask the experts, trust your instincts, check the details and make the decision.

Happy investing!

About the Author: Aditi Sagar | 12 Post(s)

Aditi is born and brought up in New Delhi. Right now she is in the 2nd year of her college. She is pursuing graduation from Deen Dayal Upadhaya College, Delhi University with Bachelor's In Management Studies degree. 

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