In a strategic move aimed at expanding its global footprint in the shipbuilding and ship repair industry, Mazagon Dock Shipbuilders Limited (MDL) has announced the acquisition of a controlling and substantial stake of 51% in Colombo Dockyard PLC (CDPLC), a publicly listed shipbuilding company based in Sri Lanka. The acquisition will be made through a combination of primary subscription and secondary share purchase from existing shareholders, including CDPLC’s current majority shareholder, Onomichi Dockyard Co. Ltd.

This development was approved at the Board Meeting of Mazagon Dock Shipbuilders Limited held on June 27, 2025, and disclosed to the stock exchanges under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, marking a critical milestone in MDL’s ongoing strategic expansion.

The proposed investment for acquiring this stake is USD 52.96 million, which is approximately INR 452 crore, considering the prevailing exchange rate. Upon completion, CDPLC will become a subsidiary of Mazagon Dock, significantly enhancing MDL’s international presence and operational scale in the marine infrastructure sector.

Colombo Dockyard PLC, established on June 14, 1974, is a major Sri Lankan entity listed on the Colombo Stock Exchange and engaged in the construction and repair of ships. Its registered office is located at Graving Docks, Port of Colombo, Colombo 15, Sri Lanka. With consolidated turnover of LKR 25,447 million for the financial year ending December 31, 2024, and a net worth of LKR 5,311 million, CDPLC stands as a key player in the region’s maritime sector.

The acquisition is structured through both primary subscription (issuance of new shares) and secondary acquisition (purchase from existing shareholders). Mazagon Dock has entered into definitive agreements with CDPLC and Onomichi Dockyard Co. Ltd., clearly outlining the terms and conditions governing this strategic acquisition.

The objective of this acquisition is multifaceted:

• Strengthening operational capabilities: By leveraging CDPLC’s facilities and infrastructure, Mazagon Dock can expand its own capabilities and tap into newer markets.

• Unlocking cross-border synergies: The tie-up will enable knowledge-sharing, technology integration, and efficient resource utilization across both entities.

• Enhancing global presence: The acquisition allows MDL to position itself as a competitive global player in shipbuilding and repairs.

• Boosting R&D and innovation: Through collaboration, the company aims to improve its research and development outcomes and product offerings.

The acquisition is, however, subject to standard closing conditions, including regulatory approvals from authorities in Sri Lanka such as the Colombo Stock Exchange and other statutory bodies. The expected timeline for completion is between 4 to 6 months, provided all required approvals are received without delay.

As per the details disclosed in the annexure to the SEBI communication:

• Industry Classification: Shipbuilding and ship repair

• Consideration Type: Entirely in cash

• Acquisition Price: Not exceeding USD 52.96 million

• Post-Acquisition Shareholding: At least 51%, thereby granting controlling rights

• Geographical Presence: CDPLC operates out of Sri Lanka, but its client base and operations extend internationally.

This move does not fall under related party transactions, and neither the promoters nor group companies of Mazagon Dock have any existing stake in CDPLC. This ensures the deal is conducted at arm’s length and aligns with fair market practice.

CDPLC has had a steady presence in the Sri Lankan shipbuilding sector with the following recent financial performance:

• FY 2024: LKR 25,447 million

• FY 2023: LKR 36,168 million

• FY 2022: LKR 27,292 million

Despite a marginal decline in 2024 compared to 2023, the company maintains a healthy market presence and a diversified business model.

Mazagon Dock, a Government of India Undertaking, continues to expand its operational portfolio. Having built a legacy in naval shipbuilding, submarines, and complex warships, this acquisition allows MDL to diversify and broaden its revenue streams through commercial and international shipbuilding ventures. The synergy with CDPLC is expected to yield long-term benefits, not just in financial terms, but also in enhancing technological sophistication and global competitiveness.

This acquisition also supports India’s ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives by reinforcing Indian capabilities in global defence and maritime infrastructure development. Mazagon Dock’s entrance into Sri Lanka, a strategic maritime nation, positions it well to serve markets in the Indian Ocean Region (IOR), Southeast Asia, and potentially the African and Middle Eastern sectors.

From a shareholder perspective, this acquisition reflects positively on MDL’s commitment to strategic growth, prudent financial management, and international expansion. The cash-based investment signals strong liquidity and a sound balance sheet capable of supporting overseas ventures.

The Board meeting, where the acquisition was approved, commenced at 11:00 IST and concluded at 14:45 IST on June 27, 2025, demonstrating the depth of deliberation undertaken by the company’s leadership in evaluating this transaction.

In conclusion, the acquisition of a controlling 51% stake in Colombo Dockyard PLC for INR 452 crore is a transformative step for Mazagon Dock Shipbuilders Limited. It aligns with its long-term vision of becoming a leading global force in shipbuilding, adding international assets to its portfolio, and enabling value creation for stakeholders. The collaboration with CDPLC and its existing shareholder Onomichi Dockyard sets the stage for deeper regional integration and a diversified service offering in the years ahead.

This international expansion not only enhances Mazagon Dock's global reach but also reaffirms its role as a key driver of India’s growing prominence in the global maritime industry.

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