Mazagon Dock Share Price Declines Amid Government’s Stake Sale Plan

Market Performance

Shares of Mazagon Dock Shipbuilders declined 6% on April 4 as the government announced plans to divest up to 4.83% of its stake in the company. At around 9:30 AM, the stock was trading at Rs 2,579 per share on the BSE. The company's 52-week high is Rs 2,930, while its 52-week low is Rs 1,045. The market capitalization of Mazagon Dock Shipbuilders is approximately Rs 1.03 lakh crore.

Other public sector defence firms also experienced downward movement, coinciding with a 1% decline in the broader market indices. At 10:05 AM, BEML shares had declined by 4% to Rs 3,024 per share. Hindustan Aeronautics and Cochin Shipyard saw their share prices fall by 1.7% and 4.69%, respectively. Additionally, Bharat Dynamics and Bharat Electronics recorded losses of 3.45% and 2%, respectively.

Government Stake Sale Plan

The government is set to sell 1.14 crore equity shares in Mazagon Dock Shipbuilders, with an option to sell an additional 80.67 lakh shares through the Offer for Sale (OFS) mechanism. The minimum price for the share sale has been established at Rs 2,525 per share. This transaction is expected to generate approximately Rs 5,000 crore for the exchequer.

The OFS will open on April 5 for non-retail investors, while retail investors can place their bids on April 7.

Company Details

Mazagon Dock Shipbuilders is a leading entity in the India's defence sector. It is primarily engaged in the construction of warships and submarines for the Indian Navy. The company has a strong order book and continues to play a significant role in the country's defence manufacturing industry.

Summary

Mazagon Dock Shipbuilders' share price declines as the government plans to offload up to 4.83% of its stake in the company through an Offer for Sale. The floor price has been set at Rs 2,525 per share, and the share sale is expected to raise around Rs 5,000 crore. The broader market and other public sector defence firms also saw selling pressure, the stock also fell after the announcement, adding to its decline.