The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for issue of an Initial Public Offer (IPO) of Cochin Shipyard Limited (CSL).
The approval is for issue of an IPO to the public consisting of 3,39,84,000 equity shares of Rs. 10 each amounting to an equity capital of Rs. 33.984 crore of CSL consisting of fresh issue of 2,26,56,000 equity shares and sale of Government of India's stake in CSL worth 1,13,28,000 equity shares of Rs. 10, through a public offering in the domestic market according to Securities and Exchange Board of India (SEBI) rules and regulations.
The fresh shares are being issued by CSL in order to part-finance the following areas for expansion in short and medium term: (i) Setting up of an International Ship-repair Facility (ISRF) at Cochin Port Trust area, and, (ii) Setting up of a large dry dock within the CSL premises to take up construction of larger ships such as large sized Aircraft Carriers, VLCCs etc. and to take up underwater repairs to rigs and semi submersibles. The disinvestment of the Government of India's stake in CSL is in line with the Government's decision on the issue. It will raise resources for the Government due to the sound financial condition of CSL. There would be no financial outgo from the Government on account of the issue of shares. Instead, the Government would earn revenue due to sale of its shares to the public.
CSL was incorporated in 1972 as a fully owned Government of India Undertaking and was conferred Miniratna-I status in 2008.