The two-day Offer for Sale (OFS) by Cochin Shipyard Limited (CSL) to divest 5 percent of the government’s stake has garnered significant interest, particularly from retail investors. This follows the Department of Investment and Public Asset Management (DIPAM) officially announcing the success of the sale, with both institutional and retail buyers showing a strong appetite for the company’s shares.
Government’s Divestment Strategy
The OFS is part of the Indian government’s ongoing initiative to reduce its stake in public sector undertakings (PSUs) as part of its broader divestment program. This initiative aims to meet fiscal targets by raising capital through the partial sale of equity in public enterprises. For Cochin Shipyard Limited, the government initially divested 2.5 percent of its stake with the option to offer an additional 2.5 percent, referred to as the green shoe option.
Day 1: Non-Retail Investors Show Strong Demand
On October 16, the OFS was opened for non-retail investors, including institutional buyers, and the response was highly positive. The non-retail category was oversubscribed by 2.16 times the base size, signaling robust demand from institutional investors. Given the overwhelming response, the government exercised the green shoe option, further increasing the available equity for sale.
Day 2: Retail Investors Join the Frenzy
On October 17, the OFS was extended to retail investors and employees of Cochin Shipyard. Retail participation was strong, reflecting growing confidence in the company’s performance and future prospects. In a statement, the Secretary of DIPAM expressed gratitude, saying, “The second day of Cochin Shipyard Limited OFS closed with good interest from retail investors. We thank all investors for their participation,” in a social media post on X.
Cochin Shipyard
Cochin Shipyard Limited is regarded as one of India’s foremost shipbuilding and ship-repair companies, playing a pivotal role in both defense and commercial maritime projects. The company’s capabilities and its strategic importance in supporting India’s naval and commercial shipbuilding needs have positioned it as a major player in the global shipbuilding industry.
A Key Step in the Government’s Divestment Targets
The successful divestment of CSL shares marks another step toward achieving the government’s divestment goals for the fiscal year. The sale not only helps the government raise funds but also allows investors—both retail and institutional—to partake in the growth trajectory of a company with immense potential.
MUST READ | ‘Wayanad Voters Eager For Priyanka Gandhi’s Leadership’, Says KC Venugopal
