Shares of Cochin Shipyard Ltd recovered in Wednesday's trade after plunging 5 per cent in early trade, as the two-day offer for sale (OFS) by the government kicked off. The stock tanked 4.90 per cent to hit a low of Rs 1,590 on BSE but staged a recovery soon. At 9.30 am, it was quoting at Rs 1,640.10, down 1.91 per cent.
This is even as the floor price of the OFS was set at Rs 1,540, which was at 7.89 per cent discount to its previous close.
"The government has not had any compulsion to sell stakes in PSUs. The stratospheric valuations of certain PSUs may not hold up with large government stake sales," Kotak Institutional Equities had warned earlier this month.
In its Q2 preview note, Kotak said Cochin Shipyard saw muted order inflows in Q2FY25. The domestic brokerage is anticipating Cochin Shipyard to record 10 per cent top line growth for the September quarter, driven by the execution of ASW Corvette, NGMV projects, with Ebitda margins seen falling sequentially due to lower contribution from IAC ship repair order.
The government is looking to sell up to 65,77,020 shares, representing 2.50 per cent of the total paid up equity share capital today. There is a green shoe option of another 2.5 per cent stake sale.
Only non-retail investors are allowed to place their bids today. While placing their bids, non-retail investors may indicate their willingness to carry forward their un-allotted bids to T+1 day for allocation to them in the unsubscribed portion of retail category.
Retail investors, Cochin Shipyard employees and for non-retail investors who decide to carry forward their un-allotted bids from T day, can bid on Thursday.