Cochin Shipyard soars over 20 per cent post debut on bourses

Making a modest debut in the stock market on Friday, Cochin Shipyard got listed on BSE at Rs 435, at a premium of 0.69 per cent, amounting to an issue price of Rs 432. 

Whereas on the NSE, the stock got listed at Rs 440, at a premium of 1.85 per cent.    

However, the stock soared quickly, rising by 20.83 per cent to trade at a substantial high of Rs 522 on BSE, despite a low market on Friday with the Indian benchmark index, Nifty and Sensex ending at their lowest closing level and the BSE midcap and smallcap indices down by nearly 3 per cent in the intraday trade on Friday. Thus, recording a strong investor response in its IPO gimmick.          

The IPO that was held between August 1-3 had subscribed 76.19 times, with the qualified institutional buyers (QIBs) fraction getting bids for 63.52 times. While the non-institutional investors recorded a bids for 288.87 times and retail investors for 8.51 times. 

The mini-ratna company's order book was worth over Rs 3,300 crore with three big tenders of the Indian Navy. Further, the government's make in India initiative and growing inclination towards strengthening the defence sector is expected to provide more opportunities for the company. 

Joining the bandwagon of listed companies, Cochin Shipyard will compete with ABG Shipyard, Bharati Defence and Infrastructure (Bharati Shipyard) and Reliance Defence and Engineering (RDEL). However, none of these stocks have performed too well on the bourses over the previous year, with Cochin Shipyard being the only profit making firm in the category.