What are the key highlights of the Mazagon Docks IPO, that is opening on September 28?

The all important IPO of the PSU, Mazagon Docks opens for subscription on September 29 and will close on October 01 after remaining open for 3 days. It needs to be remembered that most banks don’t function on September 30 due to half yearly closing.

Mazagon Docks and Shipyards Ltd manufactures warships, frigates and submarines for the Indian Navy. In addition, Mazagon also manufactures cargo ships, multi-purpose support vessels, barges, tugs, dredgers and water tankers for commercial clients.

The IPO will be structure as an offer for sale or OFS. The issue will be priced in the range of Rs.135-145, pegging the total issue size at Rs.443.69 crore. The government will only divest part of its stake in Mazagon to the public through this issue.

For retail investors under the Rs.2 lakh category, the minimum bid lot for Mazagon is 103 shares and in multiples thereof. Post issue, the government stake will fall from 100% to 84.8%. Mazagon Docks is profit making with consistent NPMs of 10-11% over last 3 years.