GOVERNMENT SELL ITS STAKE IN MAZEGAON DOCK

The Indian government will sell its stake in Mazagon Dock Shipbuilders Ltd. through an initial public offering coinciding with its divestment drive in state-run entities. The Miniratna status builder of warships, submarines and commercial vessels plans to raise Rs 444 crore through the maiden offer, the price band for which has been set at Rs 135-145 apiece, according to its red herring prospectus. The issue comprises an offer-for-sale of up to 3.06 crore shares by the shipyard’s promoter—the Government of India, acting through the Ministry of Defence.

The issue opens on: Sept. 29

The issue closes on: Oct. 1

Face value: Rs 10 apiece

Listing on: NSE, BSE

Minimum Bid: 103 shares (and in multiples of 103 shares thereafter)

(i) The Company is owned by the Government of India and is operating under the administrative control of the Ministry of Defence, Department of Defence Production. The Company was conferred the ‘Mini-Ratna’ status in 2006, by the Department of Public Enterprises.

(ii)They are a defense public sector undertaking shipyard under the Department of Defence Production, MoD with a maximum shipbuilding and submarine capacity of 40,000 DWT engaged in the construction and repair of warships and submarines for the MoD for use by the Indian Navy and other vessels for a commercial client.

(iii) The business divisions in which the company operates are:

(a) Shipbuilding

The shipbuilding division includes the building and repair of naval ships. They are currently building four P-15 B destroyers and four P-17A stealth frigates and undertaking repair and refit of a ship for the MoD for use by the Indian Navy.

(b) Submarine and heavy engineering

The submarine and heavy engineering division include building, repair, and refits of diesel-electric submarines. They are currently building/ in the process of delivering four Scorpene-class submarines under a transfer of technology agreement with Naval Group as well as one medium refit and life certification of a submarine for the MoD for use by the Indian Navy.

Since 1960, they have built a total of 795 vessels including 25 warships, from advanced destroyers to missile boats and three submarines. They have also delivered cargo ships, passenger ships, supply vessels, multi-purpose support vessels, water tankers, tugs, dredgers, fishing travelers, barges, and border outposts for various customers in India as well as abroad.

Financials:

The Company has posted profits continuously in the last four Fiscals.

1. The total income was ₹4274 Crores, ₹5027 Crores, ₹5204 Crores, and ₹5535 Crores for Fiscals 2017, 2018, 2019, and 2020 respectively.

2. The profit for the year was ₹598 Crores, ₹496 Crores, ₹532 Crores, and ₹477 Crores for Fiscals 2017, 2018, 2019, and 2020 respectively.

Competitive Strength

• India’s leading public sector defence shipyard company.
• World class infrastructure facilities.
• Strategic location at Mumbai on the west coast of India.
• Strong order book and financial position.

LEGAL TEAM

Cyril Amarchand Mangaldas advised in relation to INR 443.68 crore IPO of Mazagon Dock Shipbuilders Limited’s (Mazagon Dock) initial public offering (IPO). Mazagon Dock is defence public sector undertaking shipyard under the administrative control of the Ministry of Defence (MoD), Government of India. It is engaged in construction and repair of warships and submarines for the MoD for use by the Indian Navy.

The Capital Markets Team of Cyril Amarchand Mangaldas acted as legal counsel to Yes Securities (India) Limited (Yes Securities), Axis Capital Limited, Edelweiss Financial Services Limited, DAM Capital Advisors Limited (formerly known as IDFC Securities Limited) and JM Financial Limited (collectively the “BRLMs”).

The Transaction Team was led by Reuben Chacko, Partner; with support from Vinay Sirohia, Principal Associate; Tanvi Kini, Associate; and Saurav Das, Associate.

As a part of the Transaction, Mazagon Dock offered 30,599,017 equity shares of the face value of INR 10 each (Equity Shares) through an offer for sale of Equity Shares by the President of India acting through the Ministry of Defence, Government of India (Selling Shareholder) for cash at a price of INR 145 per Equity Share aggregating to INR 443.68 crore.

Other parties involved in the transaction included:

DSK Legal (acted as domestic legal counsel to the Company and the Selling Shareholder)
Riker, Danzig, Scherer, Hyland & Perretti, LLP (acted as international legal counsel to the Company and the Selling Shareholder)
JCR & Co., Chartered Accountants (Statutory Auditors of Company)

About Cyril Amarchand Mangaldas

Cyril Amarchand Mangaldas takes forward the values going back 103 years, of the erstwhile Amarchand & Mangaldas & Suresh A. Shroff & Co., whose pre-eminence, experience and reputation of almost a century has been unparalleled in the Indian legal fraternity. Tracing its professional lineage to 1917, the Firm of Cyril Amarchand Mangaldas is now the largest full-service law firm in India, with over 750 lawyers including over 130 partners, and offices in India’s key business centres at Mumbai, New Delhi, Bengaluru, Hyderabad, Chennai and Ahmedabad. The Firm advises a large, and varied client base that includes domestic and foreign commercial enterprises, financial institutions, private equity funds, venture capital funds, start-ups and governmental and regulatory bodies.

The firm, Cyril Amarchand Mangaldas, was recently awarded with “India – Firm of the Year” at the AsiaLaw Regional Awards 2019 and “India Deal Firm of the Year” at the In-House Community Counsels of the Year Awards 2019. The firm was also named as the “Most Innovative National Law Firm of the Year – India for 2018” at the IFLR Asia Awards, having also been successful in winning the prestigious & coveted “National Law Firm of the Year, 2018 for India” at the Chambers Asia-Pacific Awards. The firm was also voted as the “Employer of Choice for 2018” from India, by the Asian Legal Business, now 4 years in a row, building upon the several awards that the erstwhile Amarchand & Mangaldas & Suresh A. Shroff & Co. had won in the past.