Centre Plans Stake Sale in Cochin Shipyard; OFS May Launch Within Six Months

The Government of India is reportedly considering an Offer for Sale (OFS) in state-run defence shipbuilder Cochin Shipyard Ltd as part of its ongoing disinvestment programme. According to sources, the Centre may dilute around 6–8 per cent of its stake in the company, potentially mobilising more than ₹16,000 crore.

Sources familiar with the development indicated that the floor price for the proposed OFS is likely to be fixed at a discount of around 6–8 per cent to the prevailing market price in order to attract wider investor participation. However, the final offer size and pricing are yet to be determined.

Neither the government nor Cochin Shipyard has made any official announcement regarding the proposed stake sale.

Government Remains Majority Shareholder

As per the latest shareholding pattern, the President of India, the promoter of Cochin Shipyard Ltd, held a 67.91 per cent stake in the company. Institutional investors continue to maintain a significant presence in the stock, with Life Insurance Corporation of India (LIC) holding 87.74 lakh shares, representing a 3.34 per cent stake.

Market observers believe that the proposed OFS could further enhance public shareholding in the company while generating substantial revenue for the government.

Launch Likely Within Six Months

Sources suggest that the timing of the OFS is currently under consideration and may depend on market conditions and investor sentiment. The issue could be launched within the next three to six months.

The OFS route has been one of the government’s preferred mechanisms for stake dilution in listed public sector enterprises, enabling efficient fundraising while improving public float and market liquidity.

Part of Broader Disinvestment Strategy

The proposed stake sale in Cochin Shipyard forms part of the Centre’s broader disinvestment and asset monetisation agenda. The government has already raised ₹13,389 crore through stake sales in public sector undertakings during the current financial year.

Major transactions completed so far include:

• ₹5,542 crore through stake sale in Coal India Ltd
• ₹4,357 crore through NHPC Ltd
• ₹2,266 crore through Central Bank of India
• ₹1,223 crore through NLC India Ltd

The government has set an ambitious target of mobilising over ₹80,000 crore through disinvestment and asset monetisation initiatives during FY27.

Strong Investor Appetite for PSU OFS Issues

The proposed Cochin Shipyard OFS comes on the back of strong investor response to recent government stake sales. The Centre recently completed the sale of a 5 per cent stake in General Insurance Corporation of India (GIC Re) through the OFS route.

According to the Department of Investment and Public Asset Management (DIPAM), the issue received robust demand and was oversubscribed 3.72 times on the first day of bidding by non-retail investors. The government had initially offered a 2 per cent stake with a 3 per cent green-shoe option, which was fully exercised following strong investor interest.

The successful completion of OFS issues in companies such as Coal India, NHPC, Central Bank of India and GIC Re has reinforced confidence in the government’s disinvestment strategy.

More PSU Stake Sales on the Horizon

Sources further indicated that the government is evaluating additional stake dilution opportunities across several public sector enterprises. Plans are also underway to list subsidiaries of Coal India Ltd in phases, with two subsidiaries having already filed draft documents for listing.

Industry experts believe that more defence and infrastructure-focused PSUs could witness similar stake sale initiatives as the government seeks to unlock value, deepen capital markets and meet its ambitious disinvestment targets.

If approved, the Cochin Shipyard OFS would mark another significant milestone in the Centre’s efforts to monetise public assets while broadening retail and institutional participation in India’s public sector enterprises.