Government to sell up to 5% stake in Cochin Shipyard; check floor price, other key details

State-run Cochin Shipyard Ltd on Tuesday informed exchanges that the government will sell up to 5 per cent stake in the defence firm through the offer-for-sale (OFS) route. The issue opens on October 16 (Wednesday) for non-retail investors and its floor price has been fixed at Rs 1,540 per share, a discount of 7.90 per cent compared to Tuesday's closing price of Rs 1,672. The OFS will include a base offer of a 2.5 per cent stake and a green shoe option of another 2.5 per cent. The issue will open on October 17 (Thursday) for retail investors.

"The government proposes to sell up to 65,77,020 Equity Shares of the company, (representing 2.50 per cent of the total paid-up equity share capital) (Base Offer Size), on October 16, 2024, (T day) (for non-Retail Investors only) and on October 17, 2024 (T+1 day) (for Retail Investors, Employees and for non-Retail Investors who choose to carry forward their un-allotted bids from T day) with an option to additionally sell 65,77,020 Equity Shares (representing 2.50 per cent of the total issued and paid up equity share capital) (the Oversubscription Option) through a separate, designated window of the Stock Exchanges, collectively representing 5 per cent of the total issued and paid up equity share capital in accordance with the OFS Guidelines," BSE filing stated.

"Only Retail Investors (defined below) shall be allowed to place their bids on T+1 day, i.e., October 17, 2024. Further, those non-Retail Investors who have placed their bids on T day and have chosen to carry forward their unallotted bids to T+1 day, shall be allowed to revise their bids on T+1 day as per the OFS Guidelines. The floor price for the Offer shall be Rs. 1540.00 per Equity Share," it added.

Bourses BSE and NSE have put the securities of Cochin Shipyard under the long-term ASM (Additional Surveillance Measure) framework. Exchanges put stocks in short-term or long-term ASM frameworks to caution investors about high volatility in share prices.

The counter traded higher than the 5-day, 10-day and 200-day simple moving averages (SMAs) but lower than the 20-day, 30-, 50-, 100-day and 150-day SMAs. The counter's 14-day relative strength index (RSI) came at 42.37. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 49.73 against a price-to-book (P/B) value of 8.75. Earnings per share (EPS) stood at 33.62 with a return on equity of (RoE) 17.60. As of June 2024, the government held a 72.86 per cent stake in the firm.