Mazagon Dock Shares Drop 6% as Government Announces Stake Sale
Shares of Mazagon Dock Shipbuilders fell 6% on April 4 after the government unveiled plans to divest up to 4.83% of its stake in the company through an Offer for Sale (OFS). By 9:30 AM, the stock was trading at Rs 2,579 on the BSE, down sharply from its 52-week high of Rs 2,930. The company’s current market capitalization stands at approximately Rs 1.03 lakh crore.
The OFS comprises 1.14 crore equity shares, with an option to offload an additional 80.67 lakh shares, and has a floor price of Rs 2,525. The sale is expected to fetch nearly Rs 5,000 crore for the exchequer.
The announcement triggered broader weakness in public sector defence stocks. At 10:05 AM:
- BEML shares were down 4% at Rs 3,024
- Hindustan Aeronautics (HAL) declined 1.7%
- Cochin Shipyard shed 4.69%
- Bharat Dynamics and Bharat Electronics slipped 3.45% and 2%, respectively
The pressure on these stocks coincided with a 1% drop in broader market indices, amplifying the downside.
Mazagon Dock Shipbuilders plays a pivotal role in India’s defence manufacturing sector, specializing in the construction of warships and submarines for the Indian Navy. Despite a strong order book, investor sentiment turned cautious following the divestment announcement.
