Please refer to important disclosures at the end of this report
Mazagon Dock Shipbuilders Ltd (MDSL)
is India's leading defence public sector
rtaking shipyard under the Ministry of Defence (MoD). Mazagon Dock is
primarily engaged in constructing and repairing warships and submarines for
MoD and other types of vessels i.e. cargo ships, multipurpose support vessels,
barges and border outposts, tug
s, dredgers, water tankers, etc. for commercial
Strong order book provides revenue visibility: Currently, MDSL has
book of around `54,074cr that provides revenue visibility for long-term.
book comprises of four P-15 B destroyers, four P-17A
and refit of a ship, four Scorpene class submarine
s and one medium refit and
life certification of a submarine.
Government’s focus on indigenization to boost Indian defence: MDSL’s
on indigenization under ‘Make in India’, ‘Atmanirbhar Bharat’, etc.
key positive for growth. Recently, the government has taken steps
defence items, which clearly indicates government’s focus on indigenization
promote and create big opportunities in Indian defence sector. Going ahead, it
would be beneficial for companies like MDSL.
Plans to diversify revenue: MDSL intends to foray into segments like exporting
its products, focus on ship repair facility and also enhancing i
manufacturing capacity th
at would help the company to diversify its revenue in
Outlook & Valuation: In terms of valuations, the pre-
issue P/E works out to 6.1x
FY20 earnings (at the upper end of the issue price band), which is lower vs.
peers like Garden Reach Shipbuilders and Cochin Shipyard
and 6.6x of its FY20 earnings, respectively). Further, MDSL
~16% coupled with
highest dividend yield (7.4%) and higher cash on balance
sheet among its peers. Hence, considering the above positive f
recommend SUBSCRIBE to the issue with a long-term horizon.
Y/E March (Rs cr)
Angel Research; Note: Valuation ratios based on pre-issue outstanding shares and at upper end
Issue Open: Sep 29, 2020
Issue Close: Oct 01, 2020
Offer for Sale: 3cr Share
QIBs 50% of issue
Non-Institutional 15% of issue
Retail 35% of issue
Face Value: Rs.10
Present Eq. Paid up Capital: Rs202cr
Post Issue Shareholding Pattern
Post Eq. Paid up Capital: Rs202cr
Issue size (amount): **Rs444cr
Price Band: Rs135-145
Lot Size: 103 shares and in multiple thereafter
Post-issue implied mkt. cap: * Rs2,723cr - **Rs2,925cr
Promoters holding Pre-Issue: 100%
Promoters holding Post-Issue: 85%
*Calculated on lower price band
** Calculated on upper price band
Amarjeet S Maurya
+022 39357600, Extn: 6831
Mazagon Dock Shipbuilders Ltd.
IPO Note | Defenc