Mazagon Dock IPO

Mazagon Dock IPO Details

Mazagon Dock shipbuilders limited, is India’s premier public sector war-shipbuilding company, aptly called ‘Shipbuilder to the Nation’. Mazagon Dock’s core activities include building and constructing ships and submarines for the Ministry of Defence. It is the only shipyard that builds naval destroyers and submarines for the Indian Navy.

Strategically located in the West coast of India, Mazagon Dock shipbuilders limited has built 795 vessels, including 25 warships, 4 missile boats, 3 submarines, 6 Leander class frigates, 3 Godavari class frigates, 3 Shivalik class frigates, 3 corvettes, and 6 destroyers until 2020.

• The total Issue Size is 30.6mn shares (Rs. 4,130.9 - 4,436.9mn) of Rs.10 each
• Mazagon Dock shipbuilders IPO consists only of Offer for Sale portion. OFS is of 30.6mn shares Shares and will be listed in the National and Bombay Stock Exchange
• With this IPO; Mazagon Dock intends to carry out disinvestment plan

Mazagon Dock IPO Review/Ratings

Key Competitive Strengths

1. Only public sector defence shipyard constructing conventional submarines
2. World class infrastructure capable of serving the requirements of the MoD
3. Location of facilities promotes closer association with its vendors and customers
4. Increase in indigenization of vessels and implementation of the "Make in India" campaign
5. Established track record with strong financial position and strong order book
6. Experienced board and senior management team and skillfully trained workforce

Risks and Concerns

1. Subdued economic activities post Covid19 led lockdown
2. Unfavorable change in defence procurement policy and lower defence budget
3. Project execution delay
4. Increased competition
5. Difficulty in maintaining the profitability

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Mazagon Dock IPO Fundamental Analysis

• Revenue from Operations increased from 46,139.6 mn in FY 19 to 49776.5 mn in FY 20. This is a growth of 7.9%
• MDSL is a defense public sector undertaking shipyard with a maximum shipbuilding and submarine capacity of 40,000 DWT (deadweight tonnage). The company is primarily engaged in the construction and repair of warships and submarines for the MoD for use by the Indian Navy and other vessels for commercial clients.
• As of 31st Jul. 2020, it had an order book of Rs. 540,740mn which is to be executed in the next 6-7 years. The current order book is around 10.9x of its TTM revenue, thereby providing revenue visibility for the mid to long term.
• The company is India’s only shipyard to have built destroyers and conventional submarines for the Indian Navy. The business divisions in which the company operates are (i) shipbuilding and (ii) submarine & heavy engineering
• Promoter holds a 100% stake in the company and post-IPO this will come down to 84.83%. Public holding will increase from current nil to 15.17%.
• Price to Earnings Ratio (P/E) for FY20 = 6.1
• Debt to Equity = 0
• Return on Equity (ROE) for FY 20 = 15.5%
• Price to Book Ratio (P/B) = 1.0
• Return on Capital Employed (ROCE) = 4.4%
• Earning Per Share (EPS) = 23.7

Online Procedure to Apply For Mazagon Dock IPO

1. Go to the IPO Section => IPO Listing => Open IPO.
2. On tapping Mazagon Dock IPO, you can directly click on Subscribe to apply or even view the IPO details.
3. On the Subscribe Screen/Page, you will be required to enter the number of lots, cut-off price, UPI ID and tap Verify.
4. Once you select 'Subscribe'. Your bid will be executed.
5. You can check the status of your IPO bid in the IPO Transactions section.