2:1 Stock Split & Rs 22,000 Crore Order Book: President Of India To Sell 65,77,020 Shares Of This Multibagger Shipbuilding & Repair Company Via OFS
The stock gave multibagger returns of 225 per cent in just 1 year whereas BSE Sensex Index is up by 23.5 per cent.
On Tuesday, shares of Cochin Shipyard Ltd gained 4.66 per cent to an intraday high of Rs 1,685 per share from its intraday low of Rs 1,610. At the closing bell, shares of the company were trading at Rs 1,672 per share, up 3.03 per cent with a spurt in volume by more than 1.01 times. The stock’s 52-week high is Rs 2,977.10 and its 52-week low is Rs 435.75.
The President of India, through the Ministry of Ports, Shipping, and Waterways, plans to sell a stake in Cochin Shipyard Limited via an Offer for Sale (OFS). The sale will involve up to 65,77,020 equity shares, constituting 2.5 per cent of the company’s paid-up equity. The offer is scheduled for October 16, 2024, for non-retail investors, with retail investors, employees, and those carrying forward un-allotted bids gaining access on October 17, 2024. An additional 2.5 per cent may be offered under the oversubscription option, bringing the total offer to 5 per cent.
As part of this OFS, 25,000 shares are reserved for Cochin Shipyard's eligible employees, representing 0.19 per cent of the total offer. Employees may bid for up to Rs 500,000 worth of shares. The sale follows SEBI's OFS guidelines, including operational frameworks from BSE and NSE. Retail investors will have the opportunity to bid at or above the floor price or opt for the cut-off price, which may allow for a discount on the final allocation price.
Non-retail investors who submit bids on October 16 and choose to carry forward unallocated bids to the following day will have the chance to revise their bids. The allocation of shares will be determined based on a price-priority method, with a minimum of 25 per cent of the offer reserved for mutual funds and insurance companies. In case of oversubscription, the additional shares will be allocated as per the oversubscription option.
The OFS will be conducted through designated brokers and on a separate window provided by the stock exchanges. Participants are required to read the offer details thoroughly, including SEBI guidelines, before placing their bids. This offer is for information purposes only and is subject to the terms and conditions outlined in the contract notes provided to successful bidders.
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Cochin Shipyard Ltd (CSL) is a leading player in the construction of all kinds of vessels, repairs and refits of all types of vessels including periodic upgradation and life extension of ships. The company has a market cap of over Rs 43,900 crore and as of March 31, 2023, the company’s order book stands at approx. Rs 22,000 crore. Furthermore, the shares of CLS underwent a stock split of equity shares from a face value of Rs 10 to a face value of Rs 5 on January 10, 2024.
According to Quarterly Results, net sales increased by 62.1 per cent to Rs 771.5 crore, operating profit increased by 61 per cent to Rs 261.4 crore and net profit increased by 77 per cent to Rs 174.2 crore in Q1FY25 compared to Q1FY24. In its annual results, net sales increased by 62 per cent to Rs 3,830.45 crore and net profit increased by 157 per cent to Rs 783.28 crore in FY24 compared to FY23.
The President of India owns 19,16,86,928 shares or 72.86 per cent stake in the company. As of June 2024, DIIs have increased their stake to 2.50 per cent compared to 2.45 per cent respectively in March 2024. The stock gave multibagger returns of 225 per cent in just 1 year whereas BSE Sensex Index is up by 23.5 per cent. Investors should keep an eye on this shipbuilding stock.
Disclaimer: The article is for informational purposes only and not investment advice.