Incorporated in 1969, Cochin Shipyard Limited is one of the largest public sector shipyard in India in terms of dock capacity. They operates a shipyard that provides shipbuilding and ships/offshore structures repair services. Cochin Shipyard's shipbuilding activities include the construction of vessels for clients operating in the defense and in
the commercial sector shipping industry. In addition to shipbuilding and ship repair, they also offers marine engineering training programs as well as offer additional courses, including six months practical training for marine engineering students from colleges affiliated to universities, fire prevention and firefighting, and elementary first aid training
through its marine engineering training institute; and chemical, mechanical, and non-destructive testing services of metals, welds, and alloys. They have built and delivered vessels across broad class ifications including bulk carriers, tankers, Platform Supply
Vessels (“PSVs”), Anchor Handling Tug Supply vessels (“AHTSs”), barges, bollard pull tugs, passenger vessels and Fast Patrol Vessels (“FPVs ”). They are currently building India's first Indigenous Aircraft Carrier (“IAC”) for the Indian Navy.
Company Description
Opportunity to Invest in Miniratna..
Cochin Shipyard Ltd (CSL) is a PSU enjoying “Miniratna” status and the largest public sector shipyard in India in terms of dock capacity, as of March 31,
2015, according to the CRISIL Report. CSL caters to clients engaged in the defense sector in India and clients engaged in the commercial sector worldwide.
In addition to shipbuilding and ship repair, it also offers marine engineering training. As of May 31, 2017, the company has two docks – dock number one,
primarily used for ship repair (“Ship Repair Dock”) and dock number two, primarily used for shipbuilding (“Shipbuilding Dock”). CSL’s Ship Repair Dock is
one of the largest in India and enables it to accommodate vessels with a maximum capacity of 125,000 DWT and Shipbuilding Dock can accommodate
vessels with a maximum capacity of 110,000 DWT.
Now CSL is in the process of constructing a new dock, a ‘stepped’ dry dock (“Dry Dock”). This stepped dock will enable longer vessels to fill the length of
the dock and wider, shorter vessels and rigs to be built or repaired at the wider part. It is also in the process of setting up an International Ship Repair Facility
(“ISRF”), which includes setting up a shiplift and transfer system. In the last two decades, company has built and delivered vessels across broad
classifications including bulk carriers, tankers, Platform Supply Vessels (“PSVs”), Anchor Handling Tug Supply vessels (“AHTSs”), launch barges, tugs,
passenger vessels and Fast Patrol Vessels (“FPVs”). The company is currently building India's first Indigenous Aircraft Carrier (“IAC”) for the Indian Navy.
It has also grown ship repair operations and is the only commercial shipyard to have undertaken repair work of Indian Navy's aircraft carriers, the INS Viraat
and INS Vikramaditya.
To part finance setting up of new dry dock facility and an international ship repair facility along with general corpus fund needs, the company is coming out
with a maiden IPO of 33984000 equity share of Rs.10 each via book building route with a price band of Rs. 424-432 to mobilize Rs. 1440.92 to Rs. 1468.11
crore (based on lower and upper price bands). Issue consists of fresh equity issue of 22656000 equity shares and 11328000 equity shares by offer for sale. It
has reserved 824000 equity shares for eligible employees. Issue opens for subscription on 01.08.17 and will close on 03.08.17. Minimum application is to be
made for 30 shares and in multiples thereon, thereafter. Company is giving a discount of Rs. 21 per share to eligible employees and retail investors. Post
allotment, shares will be listed on BSE and NSE. Company is diluting 25% shares based on post paid up equity capital. BRLMs to this issue are SBI Capital
Markets Ltd, Edelweiss Financial Services Ltd and JM Financial Institutional Securities Ltd. Link Intime India Pvt Ltd is the registrar to the issue. Company’s
entire equity is issued at par so far. Post issue its current paid up equity capital of Rs. 113.28 crore will stand enhanced to Rs. 135.94 crore.
Competitive Strengths One of India’s leading public-sector shipyard catering to both commercial clients as well as engaged in the defence sector with a multitude of
offerings for a broad range of vessels across life cycles.
Performance Analysis On performance front, the company has posted turnover/net profits of Rs.1660.45 cr. / Rs. 69.28 cr. (FY15), Rs. 2096.88 cr. / Rs. 291.75 cr. (FY16) and Rs.
2208.50 cr. / Rs. 312.18 cr. (FY17). Thus its top and bottom line has shown consistent growth. Last three year’s average EPS is Rs. 23.38 and for FY it is Rs.
27.56. Average RoNW for last three fiscals stands at 13.76%. If we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of
18.80 plus and at a P/BV of 2.4. Listed peers are trading at a negative P/E thus this is the only company having proven and positive track record with dividend
distribution. The company has order on hands worth Rs. 2936 crore as on 31.03.17. CSL has association with world leaders like Wartsila, GTT, Rolls Royce
Marine. It has completed constructions of 20 FPVs for the Indian Costal Guard ahead of schedules. More that 72% revenue is coming from defense sector. Its
foreign clients include NPCC, Clipper, Sigba etc. Company’s ship repairs revenues have grown at 25.5 CAGR from 2012 to 2016. CSL has lined up capex of
Rs. 3000 crore for next four year


For Quick Trial – 08962000225
Or mail us here: [email protected] or visit http://www.ways2capital.com/equity-tips.php
Contact 0731-6626222
Toll Free – 1800-3010-2007
Give a Missed Call for Free Trial - 09699997717
For Reports And Tracksheets - http://www.ways2capital.com/downloads.php