In a major strategic move, India’s public sector company, Mazagaon Dock Shipbuilders (MDL), has announced that it will be acquiring a majority stake in Colombo Dockyard PLC (CDPLC).
In a stock exchange filing, the company said that the board of directors has “approved the proposal for acquisition of a controlling and substantial stake of Colombo Dockyard PLC by way of an investment not exceeding USD 52.96 million.”
Mazagon Dock, along with Colombo Dockyard and Japan’s Onomichi Dockyard, signed a tripartite agreement on Friday (27) under which MDL will acquire the Japanese company’s controlling stake in Colombo Dockyard.
The Mumbai-headquartered Mazagon Dock Shipbuilders is a public sector shipyard under India’s Ministry of Defence and is also known as the ‘Shipyard of the Nation’. It specialises in the construction of warships, submarines, and commercial vessels.
The Colombo Dockyard, which has been in a difficult position for some time, was on the verge of default. The Sri Lankan government has been requesting the Indian government to encourage Indian investors to invest in the dockyard. The Indian state-owned company was shortlisted in view of their record in shipbuilding as well as its financial strength. Both these aspects are key for the turnaround of the Colombo Dockyard.
Mazagon Dock Shipbuilders’ net worth, represented by its market capitalisation, is approximately $15.12 billion USD as of June 25, 2025. The company is almost debt-free. It has reported a turnover of approximately $1.13 billion USD. Colombo Dockyard, which is currently under financial distress, can benefit from MDL’s strong financial capabilities and resource base which can help in expediting the turnaround process. All in all, they will now be able to secure contracts that they previously missed due to poor financial health.
The acquisition shows appetite by Indian industry for global forays, including India’s state-owned companies. MDL is expected to bring an order pipeline for Colombo Dockyard from both domestic and international markets for repairs, refits, and new builds.
There is a continuous revenue stream of ship repairs from the Indian subcontinent, and MDL acquiring the controlling stakes would only further this trend.
Several orders for which potential clients are approaching MDL can also be diverted to Colombo Dockyard, which will ensure that there is a continuous revenue stream in the company.
From sharing of expertise to sharing of resources to augmentation of operations, the development helps the dockyard and growing interlinkages between India and Sri Lanka.
Source: WION
*Except for the headline, this story has not been edited by Pulseline staff.
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