Mazagon Dock Shares Plunge 10% as Government’s Stake Sale Triggers Sharp Selloff Amid Market Turmoil

Investments Indian Investments

Posted by NewAdmin on 2025-04-07 08:52:10 |

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Shares of Mazagon Dock Shipbuilders witnessed a sharp decline of nearly 10 percent on April 7, continuing their downward spiral for a third consecutive session. This steep fall came in the wake of the government’s announcement to offload up to 4.83 percent of its stake in the defence PSU through an Offer for Sale (OFS) at a floor price of Rs 2,525 per share. The stock slipped significantly below this floor price, trading at around Rs 2,294 per share during the afternoon session, marking a drop of nearly 9 percent from the set floor rate.

The decline in Mazagon Dock’s stock price was also in line with the broader market sell-off triggered by escalating global tensions. US President Donald Trump’s decision to impose fresh tariffs and the retaliatory measures by China intensified recession fears, sparking a wave of panic across global financial markets. Benchmark indices Sensex and Nifty both slumped by nearly 4 percent, adding pressure on sector-specific stocks, including those in defence. The Nifty India Defence index itself declined over 6 percent, with Mazagon Dock emerging as one of the top laggards.

In just the past five trading sessions, Mazagon Dock has shed over 13 percent of its value and is now trading nearly 22 percent below its 52-week high, reflecting the bearish sentiment prevailing in the market. The government’s OFS includes an initial sale of 1.14 crore equity shares and an additional greenshoe option of 80.67 lakh shares, aiming to raise approximately Rs 5,000 crore. According to DIPAM Secretary Arunish Chawla, 2.83 percent equity is being divested directly, with an extra 2 percent as part of the greenshoe option.

Despite volatile market conditions, Chawla described the OFS as a strategic success, stating that it was oversubscribed by 142 percent on its opening day for retail investors. He emphasized that the move was aimed at showing confidence amid negative global cues and hinted that more stake sales in PSU companies may follow soon.

Separately, Mazagon Dock’s board is scheduled to meet on April 8 to consider a proposal for the payment of an interim dividend, which could potentially provide some support to investor sentiment moving forward.

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