Mazagon Dock Shares: Government To Sell Up To 4.8% Stake Via OFS

The Indian government is poised to sell up to 4.83% of its stake in Mazagon Dock Shipbuilders Ltd. through an offer for sale, as revealed in their exchange filing on Thursday.

Mark your calendars! The share sale kicks off this Friday for non-retail investors, while retail investors, along with employees and non-retail investors carrying forward unallotted bids, will have their turn on Monday.

The base offer includes the sale of up to 1.14 crore shares, accounting for 2.83% of the company’s total equity. There’s potential for an additional 80.67 lakh shares, representing another 2% stake, to be sold through an oversubscription option. If this option is fully utilized, the government could offload a total stake of 4.83%.

What's more? They’re also looking to offer 50,000 shares (a small 0.26% of the total offer) to eligible employees, pending necessary approvals.

The floor price for these shares has been set at Rs 2,525 each, delivering a nearly 8% discount compared to the previous closing price—a tempting opportunity for investors. As of the last quarter in December, the Union government held a commanding 84.83% stake in the shipbuilding powerhouse.

However, it’s worth noting that Mazagon Dock’s share price dipped by 6.4% to Rs 2,561.25 as of this morning, with trading down 6.2% as of 9:25 a.m. Meanwhile, the benchmark Nifty 50 index was down by 0.5%. Despite this, the stock has seen a remarkable surge, increasing by 134% over the past year and up 15% year-to-date. Intriguingly, today’s trading volume hit 3.8 times its 30-day average, with the relative strength index sitting at 56.

Analyst sentiment is leaning positively as well, with three out of five analysts giving Mazagon Dock a 'buy' rating; one suggests 'hold', and another recommends 'sell.' Despite this mixed outlook, the 12-month price targets anticipated by analysts indicate a potential downside of 14%.