Cochin Shipyard Ltd, the state-owned company building India’s first aircraft carrier, is looking to file documents for its initial public offering (IPO) with the markets regulator by the end of this month, according to two people aware of the development.
The shipbuilder plans to raise about Rs600 crore from the share sale as part of its effort to expand and construct larger vessels and also undertake ship repair and fabrication. In addition, the government will sell 10% of its stake through the IPO.
Cochin Shipyard has hired a consortium of investment banks including SBI Capital Markets, JM Financial Institutional Securities Ltd and Edelweiss Financial Services Ltd.
“The work on the DRHP (draft red herring prospectus) is almost complete and it is expected to be filed before the end of this month. The government is keen on completing the IPO within the next six months and is looking at a launch timeline of December-January,” said one of the two people cited above, requesting anonymity.
Emails sent to Cochin Shipyard, Edelweiss, SBI Capital Markets and JM Financial on Wednesday went unanswered.
The share sale was approved by the Cabinet Committee on Economic Affairs in November. The IPO involves the sale of 34 million shares of Cochin Shipyard. The offer comprises the sale of 23 million new shares and the central government’s 11 million shares.
Proceeds from the sale of new shares will be used to partially finance the setting up of an international ship-repair facility at the nearby Cochin Port Trust, as well as a new dry dock to facilitate the construction of larger ships and underwater repairs of rigs and semi-submersibles.