Cochin Shipyard OFS subscribed 3.52 times on Day 1; retail investors get to bid tomorrow

The government’s offer for sale of stake in Cochin Shipyard received strong demand from investors on the first day, with the non-retail portion subscribed 3.52 times. Following the response, the government decided to exercise the full green-shoe option. Retail investors and employees will be able to bid for shares on July 8.

The OFS opened for non-retail investors on July 7. The government had offered a base stake of 2.52% of Cochin Shipyard’s paid-up equity, with an additional 2.52% available as a green-shoe option in case of oversubscription. The floor price was fixed at Rs 1,400 per share.

The strong subscription on the first day shows institutional appetite for the stock despite recent volatility in defence and shipbuilding shares. Cochin Shipyard has been among the public-sector stocks that attracted heavy investor interest over the past few years, helped by expectations of higher defence spending, shipbuilding orders and India’s push to expand domestic manufacturing.


An offer for sale allows a promoter to sell shares through the stock exchange mechanism. In this case, the government is selling part of its holding in the company. If the full base offer and green-shoe option are completed, the government’s stake will fall by 5.04%.

The floor price of Rs 1,400 per share had been set at a discount to the stock’s previous market price. Cochin Shipyard shares fell after the OFS announcement as the market adjusted to the discounted sale price and the possibility of additional supply.

Retail investors will get a separate bidding window on July 8. Employees will also be able to participate on the same day. The allotment will depend on bids received and the OFS mechanism followed by the exchanges.

The exercise of the green-shoe option means the government will sell the additional 2.52% stake that was kept available for oversubscription. This indicates that demand from non-retail investors was strong enough for the government to increase the sale beyond the base offer.

The OFS is part of the government’s broader plan to monetise holdings in public-sector companies through market transactions. It also helps increase public float in listed state-owned firms.

For investors, the second day of the OFS will be closely watched for retail demand. The response will show whether individual investors are willing to buy Cochin Shipyard at the OFS floor price after the stock’s recent rally and subsequent correction.