Philippine Coast Guard Tells Vessels To Ignore The Chinese Militia
by Karen Lema (Reuters) – The Philippines has rejected an annual summer fishing ban imposed by China in the disputed South China Sea and encouraged its boats to keep fishing...
MUMBAI, Aug 11 (Reuters) – India’s Cochin Shipyard Ltd shares rose more than 20 percent on their trading debut on Friday after a $225 million initial public offering, as investors bet on strong growth prospects for the state-run company buoyed by a flagship government programme and push to localise defence manufacturing.
The stock was trading at 514 rupees by 0600 GMT, 19 percent higher than its IPO issue price of 432 rupees, having risen to a high of 528.15 rupees. Retail investors were issued shares at a discounted price of 411 rupees.
India, the world’s fifth-biggest defence spender last year, is expected to spend $250 billion over the next decade to modernise its armed forces, and Prime Minister Narendra Modi wants new deals to involve a share of local production to help the country grow its nascent defence industry.
Cochin Shipyard, the largest state-run shipyard in terms of dock capacity, gets majority of its revenue from defence sector clients.
The company, which also operates in the commercial segment, plans to double its capacity by adding a stepped dry dock and an international ship repair facility from the 9.4 billion rupees it received from the IPO.
“The company has a very strong balance sheet and they have the best capital allocation in this industry. They are also now moving more towards the ship repair business, which has almost twice the margins as in the shipbuilding business,” said Jaikishan Parmar, senior equity analyst at Mumbai’s Angel Broking.
“Going ahead, the kind of orders they get will be key, but expect the stock to do well in the short to medium term,” he said.
The company’s IPO last week had been subscribed more than 76 times.
The Indian government, which fully owned the shipbuilder before the IPO, sold part of the stake in the offering, and will own 75 percent of the company after the new shares issue.
India’s IPO market has been strong this year with $2.6 billion worth of initial share sales in the first half. A host of state-run company IPOs including that of General Insurance Corp is set to hit the market in the coming months. ($1 = 64.1875 Indian rupees) (Reporting by Swati Bhat and Devidutta Tripathy; Editing by Amrutha Gayathri)
(c) Copyright Thomson Reuters 2017.
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