GRSE Announces Public Offer

 

L-R – RAdm Vipin Kumar Saxena, IN (Retired), Chairman & Managing Director, GRSE and S S Dogra, Director (Finance) & CFO, GRSE at a press conference in Kolkata, in connection with the forthcoming IPO

Garden Reach Shipbuilders & Engineers Limited (GRSE) is a shipbuilding company in India under the administrative control of the MoD and primarily adhere to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard. In addition to ship and warship building capabilities, GRSE is also engaged in engineering and engine production activities. As a part of the engineering division GRSE manufactures deck machinery items, pre-fabricated portable steel bridges and marine pumps.

GRSE’s shipbuilding division contributes a significant majority of revenue from operations. They derived 94.14%, 90.13%, 92.19% and 94.76% of gross revenue from operations in Fiscals 2018, 2017, 2016 and 2015 respectively from shipbuilding division.

GRSE was incorporated in 1934 under the Indian Companies Act, 1913, and was later acquired by the Government of India from Macneill & Barry Limited on May 19, 1960. Shortly after becoming a CPSE in 1960, GRSE built India’s first indigenous warship–the INS Ajay, in the year 1961.

Over the years, the Company has established capabilities for in-house design and shipbuilding and has made considerable contributions to the indigenous warship construction program of the country. Their shipbuilding product line spans from technologically sophisticated Frigates and Corvettes to Fast Patrol Vessels. In last five (5) decades, GRSE built and delivered ships ranging from small to large and advanced vessels including frigates, anti-submarine warfare corvettes, missile corvettes, landing ship tanks, landing craft utilities, survey vessels, fleet replenishment tankers, fast patrol vessels, offshore patrol vessels, inshore patrol vessels, WJ-FAC, hover crafts and fast interceptor boats to the Indian Navy, Indian Coast Guard, MHA and Governments of other countries.

GRSE built and supplied more than 750 vessels to carry men and materials as well as for the surveillance of the coast line. Over the years, GRSE responded to the varied shipbuilding requirements of the Indian Defence Services and have evolved from building simpler vessels to building bigger and technically advanced warships.

 

Garden Reach Shipbuilders & Engineers Limited (the “Company”), proposes to open on September 24, 2018, an initial public offering of equity shares of Face Value of Rs. 10 each (“Equity Shares”) for cash at a Price per Equity Share (including a Share Premium) (“Offer”) comprising a offer for sale 29,210,760 Equity Shares by the Promoter, The President of India, acting through the Ministry of Defence, Government of India (“The Selling Shareholder”).

The offer includes a reservation of up to 572,760 equity shares for subscription by eligible employees (as defined herein) (“Employee Reservation Portion”). The offer less employee reservation portion is referred to as the net offer. The offer and the net offer will constitute 25.50% and 25.00% respectively, of the post offer paid-up equity share capital of the company. The Bid/Offer Period will close on September 26, 2018.

A discount of Rs. 5 per Equity Share to the Offer Price may be offered to the Retail Individual Bidders (“Retail Discount”) and a discount of Rs 5 per Equity Share to the Offer Price may be offered to the Eligible Employees bidding in the Employee Reservation Portion (“Employee Discount”).

The Price Band for the Offer is from Rs. 115 to Rs. 118 per Equity Share. Bids can be made for a minimum lot of 120 Equity Shares and in multiples of 120 Equity Shares thereafter.

The Equity Shares are proposed to be listed on BSE and NSE.

The Book Running Lead Managers (“BRLMs”) to the Offer are IDBI Capital Markets & Securities Limited and YES Securities (India) Limited.

 

This Offer is being made in terms of rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”). In accordance with Regulation 26(1) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (“SEBI ICDR Regulations”), the Offer is being made through the Book Building Process wherein not more than 50% of the Net Offer shall be available for allocation on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (“QIB Portion”). 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Offer Price. However, if the aggregate demand from Mutual Funds is less than 5% of the QIB Portion, the balance Offered Shares available for allocation in the Mutual Fund Portion will be added to the remaining QIB Portion for proportionate allocation to QIBs.

 

Further, not less than 15% of the Net Offer shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Offer shall be available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids being received at or above the Offer Price. Further, up to 572,760 Equity Shares have been reserved for allocation and Allotment on a proportionate basis to Eligible Employees bidding in the Employee Reservation Portion, subject to valid bids being received from them at or above the Offer Price. All Bidders shall mandatorily participate in the Offer through an Application Supported by Blocked Amount (“ASBA”) process by providing details of their respective bank account which will be blocked by the Self Certified Syndicate Banks (“SCSBs”).

 

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