Cochin Shipyard on Friday made a steady stock market debut with the share trading nearly 17.30 percent or 75 points higher on the BSE. The shares opened at Rs 440.15 and touched a day's low of Rs 435, before closing at the day's high of Rs 528.15/share.Though the Cochin Shipyard share prices rallied, the company's employees could not capitalise on the bonanza as they did not fully bid for the shares earmarked for them.
At 10:05 am, the stock was trading at Rs524 on the NSE, against issue price of Rs432 and pre-opening price of Rs440.15.
India, the world's fifth-biggest defence spender previous 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. Chairman of the public sector shipyard in India, Madhu S Nair said, the company will be investing Rs 3,100 crore over the next five years for capacity expansion in both ship building as well as on the repairs side.
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"The company has a very strong balance sheet and they have the best capital allocation in this industry". In addition to shipbuilding and ship fix, it also offers marine engineering training. But for a weak market, the stock would have put up an even stronger show, say market analysts.
The initial public offer (IPO) of Cochin Shipyard had received a stellar response from investors.
The Government of India acted as the selling shareholder. A host of state-run company IPOs including that of General Insurance Corp is set to hit the market in the coming months.