Mazagon Dock Shipbuilders Ltd., a state-owned Indian shipbuilding company, has taken a major step toward expanding its global footprint by announcing the acquisition of a controlling stake in Sri Lanka-based Colombo Dockyard PLC (CDPLC). This strategic acquisition, valued at $52.96 million (approximately ₹452 crore), was approved by the company’s Board and disclosed through a stock exchange filing on June 27, 2025.

This acquisition marks Mazagon Dock’s foray into international waters, as the company will now control operations of a prominent foreign shipbuilding and repair entity in Colombo, Sri Lanka.

Structure of the Acquisition

The 51% equity stake in CDPLC will be acquired through a blend of primary and secondary share purchases:

• Primary Subscription: Mazagon Dock will subscribe to newly issued shares of CDPLC, infusing fresh capital into the company.

• Secondary Acquisition: Shares will also be purchased from Onomichi Dockyard Co. Ltd., Japan, which is the current majority shareholder in Colombo Dockyard.

Upon completion of this transaction, CDPLC will become a subsidiary of Mazagon Dock, giving the Indian public sector company operational and financial control over its Sri Lankan counterpart.

About Colombo Dockyard PLC (CDPLC)

Colombo Dockyard PLC is a listed entity on the Colombo Stock Exchange and is engaged in both shipbuilding and ship repair services. It is one of the most advanced maritime facilities in South Asia and plays a crucial role in the region’s maritime economy.

For the financial year ending December 31, 2024, CDPLC reported the following:

• Consolidated Turnover: LKR 25,447 million

• Net Worth: LKR 5,311 million

The company has a solid operational base and an established clientele in commercial shipbuilding, offshore support vessels, and maintenance services, making it a valuable asset for Mazagon Dock's global ambitions.

Strategic Importance of the Deal

This acquisition holds multiple strategic advantages for Mazagon Dock:

• International Footprint: For the first time, Mazagon Dock will own a foreign shipyard, enabling it to participate in global shipbuilding tenders and repair services more competitively.

• Geopolitical Significance: Sri Lanka’s geographical location in the Indian Ocean makes it a strategic hub for maritime activity, especially for Indian defense and commercial vessels.

• Diversification: The acquisition allows Mazagon Dock to expand into commercial and offshore vessels, sectors where Colombo Dockyard has deep experience.

• Synergies: Combining Mazagon Dock’s defense shipbuilding expertise with CDPLC’s regional customer base could open up new revenue streams.

Seller Background: Onomichi Dockyard Co., Japan

Onomichi Dockyard Co., based in Japan, has been the majority stakeholder in CDPLC for several years. It is now divesting its controlling interest to Mazagon Dock, signifying a shift in ownership from Japan to India.

While the reason behind Onomichi’s exit wasn’t disclosed, the shift may be part of a broader restructuring or strategic reorientation toward domestic operations in Japan.

Impact on Mazagon Dock’s Ownership and Financials

As per the latest available data from the March 2025 quarter, the Government of India holds 84.83% of equity in Mazagon Dock Shipbuilders Ltd., which is above the 75% public shareholding requirement mandated by SEBI for listed public sector enterprises.

With this acquisition:

• Mazagon Dock is deploying a capital investment of ₹452 crore, likely from internal accruals or reserves.

• There is no indication of external borrowing or equity dilution, preserving the company’s debt profile.

Additionally, CDPLC becoming a subsidiary means its revenues and assets will be consolidated into Mazagon Dock’s financials, potentially boosting its topline and profitability in future quarters.

Market Reaction and Share Performance

Following the acquisition announcement, shares of Mazagon Dock Shipbuilders rose by 1.54%, closing at ₹3,169.50 on the NSE.

Notably, the stock has been on a bullish trajectory, having gained over 40% in 2025 so far. This upward momentum has been driven by:

• Robust order inflows

• Defence sector tailwinds

• Strategic expansions like this overseas acquisition

The market clearly views the move as value accretive, given the global scale and long-term growth prospects it introduces for the company.

Broader Context: Indian Defence and Maritime Push

This deal is in line with the Indian government's 'Make in India' and 'Atmanirbhar Bharat' missions, which encourage public sector companies to become globally competitive and self-reliant.

The acquisition also supports:

• Regional influence in the Indian Ocean

• Enhanced defence maritime capabilities

• Stronger India-Sri Lanka economic and strategic ties

India has been actively strengthening its naval infrastructure and exports. With Mazagon Dock now owning a shipyard in a neighbouring maritime hub, it gives India additional leverage and capacity in the region.

What Lies Ahead?

The acquisition is expected to be completed following:

• Regulatory approvals from Sri Lankan authorities and stock exchange

• Compliance with international investment laws

• Finalisation of financial terms and share allotment mechanisms

Once the transaction is complete, Mazagon Dock may look to:

• Modernise Colombo Dockyard’s facilities

• Inject capital and technology upgrades

• Position CDPLC as a regional leader in commercial shipbuilding and offshore repairs

These actions could elevate the profile of both Mazagon Dock and India’s shipbuilding capabilities in global markets.

Final Thoughts:

Mazagon Dock’s acquisition of Colombo Dockyard is not just a corporate deal—it’s a strategic masterstroke. It enables global expansion, supports India’s defence and maritime interests, and adds commercial shipbuilding strength to a company known primarily for naval projects.

As CDPLC transitions into a Mazagon Dock subsidiary, the Indian PSU stands at the threshold of becoming a global maritime powerhouse.

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