Garden Reach Shipbuilders gets Sebi nod for IPO

State-owned Garden Reach Shipbuilders and Engineers has received markets regulator Sebi's go ahead to float an initial public offering.

The warship maker had filed its draft red herring prospectus (DRHP) with Sebi on March 26 and obtained its “observations” on May 22, as per the latest update with the markets watchdog.

Sebi's observations are necessary for any company to launch public issues like initial public offer (IPO), follow-on public offer (FPO) and rights issue.

Going by the draft papers, Garden Reach Shipbuilders' IPO will see government selling 20,046,600 equity share -- or a 17.5 per cent stake -- in the company.

The public issue is being made as the government intends to unlock the real value of such PSUs and bring in greater accountability.

IDBI Capital Markets and Securities and Yes Securities (India) are the merchant bankers managing the IPO. The equity shares of the company are proposed to be listed on the BSE and NSE.

Earlier this month, another state-run Rail Vikas Nigam received Sebi's go-ahead to launch an IPO, while two other firms -- Indian Renewable Energy Development Agency Ltd and RITES Ltd secured the markets watchdog approval in February.

So far this year, the government has pared its stake in Hindustan Aeronautics Ltd, Bharat Dynamics Ltd and Mishra Dhatu Nigam Ltd.

The move is part of the government's disinvestment drive aimed at raising Rs 80,000 crore from stakes sales in state-run companies in 2018-19.