Mazagon Dock IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Mazagon Dock– Defense PSU which supplies warships, submarines and destroyers to Indian Navy and Coast Guard.

Offer purpose — Divestment by Govt. of India

Key Service domains – Warship building, Refit and repairs, Export

Clients -Indian Govt.

Revenues from Key Services–95%+ for building warships, submarines

Risks

Sole dependence of Ministry of defence budget which is not increasing rapidly in recent years especially for Navy

Weak growth prospects and volatile profits

Long gestation period for the orders and revenue

Future

Company wants to tap repair and export orders but not successful yet with only 2% orders of outstanding book

Dominant Player in warship building industry with huge order book

Refit and repairs constitute 3.5% of revenue and company wants to increase it to 15-20% in coming years

Valuations

Seems reasonable and lower than other listed entities like Garden Reach and cochin shipyard

Should we apply?

People can avoid to subscribe due to weak growth prospects

Listing day may not see any gains . Recommended to book profits if any on listing day

Long term investing only when growth drivers are clear

Also Read

UTI AMC IPO crisp Summary

CAMS IPO crisp summary — Listing Awaited

Angel Broking IPO crisp summary –Listing Awaited

Happiest Minds IPO crisp summary –Listing with substantial gains

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Do spread the word among your peers, family members or anyone who can benefit from this blog and asked them to subscribe. But be selfish and take care of yourself first by subscribing before they do.

Enjoy the day and your life. Don’t forget, we are alone in this grand universe and may not get a chance to live again.

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