InvestorQ : What is the objective of the MDS(Mazgaon Dock Shipbuilders) IPO and What is the risk to the valuations of MDS?
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Dawn Cherian made post

What is the objective of the MDS(Mazgaon Dock Shipbuilders) IPO and What is the risk to the valuations of MDS?

Answer
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Dhwani Mehta answered.
4 weeks ago


The government is selling shares constituting 15.17% of Mazagon Dock Shipbuilder's pre-offer paid-up equity share capital in this issue. All proceeds from the sale of shares will go to the government and the company will not benefit from it. The fund raised from the issue will help the government reduce some of its deficit. 

There could be delays in procurement, nomination, or any other decision – making by its customers and collaborators, which may result in time and cost overruns in the completion of its shipbuilding and submarine projects, which may have an adverse effect on MDL’s business, financial condition, and operations.

Exposure to higher competition due to liberalization of policies for the Make in India initiative may result in loss of upcoming awards in favor of the private sector or foreign players and may trigger aggressive bidding, which could be detrimental to MDS' financials. In the current environment of Covid19, there could be a significant delay in starting off on projects.