Cochin Shipyard Shares Dip Over 4% As 2-Day Offer-For-Sale Begins

The biggest shipyard company in the country, the state-owned Cochin Shipyard, started its 2-day offer-for-sale on Wednesday, October 16. The government issued this OFS with only non-retail investors allowed to bid today, October 16.

What Is an OFS?

An OFS, or an Offer for Sale, is issued by promoters in India to induce fiscal mobility in the ranks and raise funds. This activity is carried out for growth & expansion. This allows the company to gain access to capital through sales to outside investors.

In an OFS, the selling shareholder establishes a floor price. This floor price is the minimum price, at which these shares can be offered.

This comes at a time when the public sector company has not had a rosy time at Dalal Street in the recent past.

Cochin Shipyard Declines

Despite bagging some crucial projects, the company shares have declined by 10.70 per cent or Rs 192.00, in the trade of the past month. Even in the past, over the past 5 trading sessions, the shipbuilder's stocks lost 4.68 per cent of their value.

On the day of the OFS, Wednesday, October 16, the company shares dropped even further. The equity that opened at Rs 1,605.20 per piece and also hit the high of Rs 1,648.90 soon started to descend into the red territory.

The decline of the shares only sharpened with the passage of the intraday trading activities. At 11:31 IST, the company shares dipped by 4.36 per cent or Rs 72.95. This took the overall value down to Rs 1,599.00 per share.

Other PSU Ship Stock Dip

It is interesting to note that other stocks in the sector also saw a decline in their value. Two other public-owned companies, Garden Reach Shipbuilders and Mazgaon Dock, also witnessed a drop in value.

Garden Reach Shipbuilders & Engineers Ltd. dropped in value by 1.03 per cent or Rs 18.35, taking the value of shares to Rs 1,755.50. Meanwhile, Mazagon Dock Shipbuilders Ltd., listed on the NSE, dropped by 2.00 per cent or Rs 88.15, taking the value of each share to Rs 4,315.00.