Kochi: The Cochin Shipyard is pressing ahead with its plan to go for an initial public offering (IPO) notwithstanding mounting opposition from trade unions.
Sources said the yard management had filed the draft red herring prospectus (DHRP) with the Securities and Exchange Board of India (SEBI) on March 24 as part of the requirements for IPO.
“Subsequent to SEBI making its observations on DHRP, corrections, if any, will be made, and the red herring prospectus will be filed for approval. It will be done in a matter of about two months. It is a standard procedure, and the stipulation is that IPO should be issued within a year of filing the prospectus. If it is not done, the whole process will have to be repeated all over again,” a source said.
The IPO move, the yard management has always maintained, is in line with the Union government’s stated policy of disinvestment. The money raised from the IPO, the yard has contended, will be utilised for infrastructure expansion and capacity building — for a larger drydock and an upcoming International Ship Repair Facility (ISRF).
The proposal is to issue an IPO of 3,39,84,000 equity shares of ₹10 each amounting to an equity capital of ₹33.984 crore. It comprises fresh issue of 2,26,56,000 equity shares and sale of the Government of India’s stake in the yard worth 1,13,28,000 equity shares of ₹10 through a public offering in the domestic market.
But the trade unions, united under the umbrella of Cochin Shipyard Joint Action Front, have cried foul and are gearing up for intense agitations. They will hold a convention on April 18 followed by a day-long strike and siege on April 29.
