Mazagon Dock Shipbuilders Ltd saw a 3% drop in its share value on Monday as the three-year IPO lock-in period concluded, freeing up 20% of the company's outstanding equity for trading. The shares, which have seen a remarkable ascent since their 2020 IPO, reached an all-time high of ₹2,484. Despite the recent dip, the company's shares are still trading at ₹2,086.
The Indian government, holding an 84% stake in the company, retains ownership of shares worth nearly ₹4,000 crore as per June quarter data. The conclusion of the lock-in period does not necessarily mean all shares will be sold.
Antique Stock Broking has suggested buying Mazagon Dock shares with a target price of ₹2,774 compared to the current market price of ₹2073.70 per share, indicating a potential rally of 34%. As of Monday, the shipbuilding company's market capitalization stood at ₹41,824.46 crore (INR100 crore = approx. USD12 million).
Over the past six months and two years, Mazagon Dock has seen significant share gains of 202% and 698%, respectively. On September 20, 2023, it traded ex-dividend for ₹6.86 per share.
Since its inception in 1960, Mazagon Dock has built a total of 801 vessels. The firm also produces jackets, wellhead platform main decks, process platforms, and jack-up rigs. Based on the current order backlog, it estimates a capacity utilization of 27% till FY25E.
In addition to this development, Mazagon Dock has revised its FY24 revenue growth projection upwards from an earlier estimate of 10-12% to now between 12-15%.
This development comes as lock-in periods for several other companies including IdeaForge Ltd., and Angel One Ltd. are set to end in October. A Nuvama Research report indicates that by 2023, lock-in periods for 227 crore shares across 37 companies will end.
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