The shares of Cochin Shipyard Limited (CSL) on Monday saw an intra-day drop by about 3 per cent amid reports claiming that the government was planning to launch an offer for sale (OFS) on its stake in the PSU.
The company's shares plunged to ₹1,418 apiece on NSE in the afternoon trading hours of Monday, as investor sentiment dampened around the news of the possible OFS.
The government currently holds a 67.91 per cent stake in CSL, which a CNBC-TV18 article said—citing sources— was below the 75 per cent level required to meet the SEBI's minimum public shareholding norms, offering a reason for further stake dilution.
The proposed stake sale was allegedly part of the government's ongoing disinvestment collections, aimed at raising resources through OFSs in public sector undertakings (PSUs).
The report added that the transaction could raise more than ₹16,000 crore, depending on the size of the issue and the pricing.
The final issue size and floor price were allegedly yet to be decided. The state-run shipbuilder had also not made any official announcement regarding a proposed stake sale, as the OFS would be dependent on market conditions over the next 3-6 months.
However, the government on Monday made a crucial announcement after which shares surged to ₹1,476 at closing that day.
"No stake sale is planned in Cochin Shipyard at present," a Finance Ministry official told NDTV Profit.
Notably, with a 67.91 per cent stake in CSL, the government is already within the permitted SEBI limit, and is actually not under any regulatory pressure to reduce its stake.
This comes amid growing government disinvestments, which sheds light on how non-tax capital receipts are linked to the government managing spending commitments.
Higher proceeds from OFSs and asset monetisation could help ease pressure on India's fiscal position, especially at a time when the West Asia crisis has led to a major spike in subsidy requirements for fertilisers and petroleum products.
The government's FY2027 asset monetisation programme targets receipts of ₹80,000 crore, which includes the IDBI Bank disinvestment—alongside the sale of minority stakes in some PSUs.
