State-run warship maker Garden Reach files for IPO
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Garden Reach Shipbuilders & Engineers Ltd has filed a draft proposal with the Securities and Exchange Board of India to float an initial public offering, joining a bunch of state-run companies in the queue to go public.

The share sale is part of the government’s aim to raise Rs 80,000 crore ($12.5 billion) from stakes sales in state-run companies in 2018-19, as it looks to boost rural and infrastructure spending as well as contain the fiscal deficit ahead of general elections by next year.

Garden Reach joins a growing list of government-owned companies preparing for their maiden share sales. The list includes Mazagon Dock Ltd, Rail Vikas Nigam Ltd, Ircon International Ltd, IRFC Ltd, National Insurance Company Ltd, United India Assurance Company Ltd and Oriental India Insurance Company Ltd.

The government recently pared its stake in aircraft maker Hindustan Aeronautics Ltd, Bharat Dynamics Ltd and alloy maker Mishra Dhatu Nigam Ltd as part of its disinvestment programme for the current fiscal year.

Here’s a snapshot of the proposed IPO by Garden Reach:


The IPO comprises only a share sale by the government. The government, which fully owns the company, will sell 200.46 million shares—or a 17.5% stake—in the company. It will get three years from the date of listing to bring its stake to 75% or below.

The IPO size is estimated at Rs 1,000-1,200 crore, two people directly aware of the matter said.

Use of proceeds

The company will not receive any proceeds from the offer. All proceeds shall go to the government.


IDBI Capital Markets & Securities and Yes Securities (India) are the merchant bankers managing the IPO.


SNG & Partners and Perkins Coie LLP are India and international legal advisors to the government and company

Link Legal India Law Services is the law firm representing the merchant banks on the IPO.


Garden Reach was incorporated in 1934 and was later acquired by the government from Macneill & Barry Ltd in May 1960. It built India’s first indigenous warship–INS Ajay—the following year.

The company mainly builds warships for the Indian Navy and the Coast Guard. It also makes deck machinery items, pre-fabricated portable steel bridges and marine pumps.

The shipbuilding division accounts for a major chunk of its revenue. In the April-September period of 2017-18, the division contributed 81% to its total revenue from operations, up from 75.1% in 2016-17.

Its shipbuilding product line spans across frigates and corvettes to fast-patrol vessels. It has built more than 750 vessels since it was acquired by the government. It has three separate shipbuilding facilities, all located in Kolkata.


The company reported a net profit of Rs 18.06 crore for the six months ended September 2017 on revenue from operations of Rs 493.15 crore. Its revenue and net profit stood at Rs 930.40 crore and Rs 12.22 crore, respectively, for 2016-17.

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