Indian giant Mazagon strikes deal to buy Colombo Dockyard for $ 53 m

Officials of Mazagon Dock Shipbuilders, Colombo Dockyard and 51% controlling shareholder Onomichi Dockyard of Japan yesterday in India witnessed the exchange of the definitive documents setting out the terms and conditions of the proposed acquisition 

• Mazagon, CDPLC and 51% owning shareholder Onomichi execute definitive documents setting out terms and conditions of proposed acquisition subject to customary closing conditions as well as certain statutory and regulatory approvals
• Listed entity Mazagon’s acquisition to be a ‘force multiplier’ for CDPLC; to propel CDPLC in a strategic move redefining regional supply chain and industrial collaboration
• Mazagon’s market capitalisation is $ 15 b and turnover is $ 1.13 b
• In FY24, CDPLC reported Rs. 4.89 b in pre-tax loss, down from 
• Rs. 13.57 b loss in FY23; retained loss amounted to Rs. 6.57 b
• Saddled with Rs. 21.2 b short-term debt and Rs. 7.45 b long term debt

By Nisthar Cassim

Indian giant Mazagon Dock Shipbuilders Ltd., (MDL) yesterday struck the deal to buy a controlling and substantial stake of Colombo Dockyard PLC (CDPLC) for $ 52.96 million (around Rs. 15.8 billion), in a development that is highly beneficial for both as well as Sri Lanka.

The proposed acquisition is subject to fulfilment of customary closing conditions as well as certain statutory and regulatory approvals.

The move was considered and approved by Mazagon Board of Directors yesterday by way of an investment not exceeding $ 52.96 million through a combination of primary subscription and secondary acquisitions from the shareholders of CDPLC (including Onomichi Dockyard Co. Ltd.), the majority shareholder of CDPLC with 51% stake.

For this purpose, the Company, CDPLC and Onomichi yesterday executed definitive documents setting out the terms and conditions of the proposed acquisition. The proposed acquisition is expected to be completed within four to six months.

CDPLC’s turnover in 2024 was Rs. 25.5 billion on a consolidated basis and its net worth is Rs. 5.3 billion. 



Apart from loss making, CDPLC is also debt saddled (over Rs. 28 billion in short and long term debt). In FY24, CDPLC reported a Rs. 4.89 billion pre-tax loss, down from Rs. 13.57 billion loss in FY23; and has retained loss of Rs. 6.5 billion.

Apart from Onomichi, Employees Provident Fund (16.34%), Sri Lanka Insurance Corporation funds (10%), Sri Lanka Ports Authority (5%) and ETF (2.4%) are the other major shareholders. Public float of CDPLC is 49% held by 5,054 shareholders. A mandatory offer is included in the proposed acquisition.

Mazagon said the proposed acquisition will enable the Company to strengthen its position in the ship repair and ship building industry by unlocking operational synergies, enhancing research development capabilities and expanding market reach. It supports the Company’s growth vision in the ship building and repair industry.

Mazagon is an ISO 9001: 2015, company listed in the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in India and is a leading public sector undertaking often referred to as the Shipbuilders to the Nation. The company’s current portfolio of designs spans a wide range of products for both domestic and overseas clients. Since 1960, Mazagon Dock has grown rapidly to become the premier shipbuilding yard in India. The company has been recognised as a trusted entity across the world driven by the commitment to service excellence and creating significant value for all stakeholders.

Mazagon Dock Shipbuilders’ net worth, represented by its market capitalisation, is approximately $ 15.12 billion as of 25 June, 2025. The company is almost debt-free. It has reported a turnover of approximately $ 1.13 billion.

Celao Capital Ltd, a member of RNH Ventures, a boutique consulting and transaction advisory firm, was the advisor to this deal for Mazagon.

The history of Mazagon Dock dates back to 1774, when a small dry dock was constructed in Mazagon, Mumbai, India. Over the years, MDL has earned a reputation for quality work and established a tradition of skilled and resourceful service to the shipping world in general.

It was incorporated as a Private Limited Company in 1934. After its takeover by the Government of India in 1960, it has grown from a single unit, small ship repair company, into a multi-unit and multi-product company, with significant rise in production, use of modern technology and sophistication of products. The company’s current portfolio of designs spans a wide range of products for both domestic and overseas clients.

Since 1960, Mazagon Dock grew rapidly to become the premier shipbuilding yard in India. MDL has been recognised as a trusted entity across the world driven by the commitment to service excellence and creating significant value to all stakeholders.

Mazagon – a force multiplier for Colombo Dockyard

Industry analysts told the Daily FT that MDL acquiring controlling stake of CDPLC will be a force multiplier for CDPLC despite some parties expressing reservations.

MDL will bring an order pipeline for CDPLC from both domestic and international markets for repairs, refits and new builds. As such there is a continuous revenue stream of ship repairs from the Indian sub-continent and MDL acquiring controlling stakes would only further this trend.

A number of orders for which potential clients are approaching MDL can also be diverted to CDPLC which will ensure that there is a continuous revenue stream in the company.

Sharing of expertise: Both the shipyards possess enormous expertise garnered over the past decades. This strength can be leveraged for mutual benefit and can result in a win-win scenario.

Sharing of resources: The resources available at both the yards can be shared for mutual benefit. For instance, the detailed design capabilities possessed by both the yards can be leveraged for projects at MDL as well as at CDPLC.

Analysts said CDPLC which is currently under financial distress can benefit from MDL’s strong financial capabilities and resource base thereby expediting the turnaround process. CDPLC is poised to secure significant contracts which it has previously missed, due to poor financial health.

Augmentation of operations: MDL can leverage its resources for augmentation of the operations of CDPLC and its subsidiaries in other ports of the country based on opportunities that may arise.

CDPLC has been in dire straits for some time. Sources claimed that Onomichi had initially sought relief from the Government of Japan and thereafter from the Government of Sri Lanka. However, neither governments could provide any financial relief. In end November 2024, the Onomichi Dockyard announced plans to exit from CDPLC exited from the Colombo Dockyard.

According to sources, the Sri Lankan Government had requested the Indian Government to encourage Indian investors to look at Colombo Dockyard. The reason was that a default by CDPLC would be serious for the Government as several State-linked entities are shareholders.

“A default would also have brought great financial distress and uncertainty for the workers employed in CDPLC,” sources said. CDPLC directly employs over 3,000 persons.

Thereafter a few Indian companies, with strong credentials, expressed an interest in the Colombo Dockyard. As per the due process followed for a listed company, Mazagon Dock Shipbuilders Ltd. was shortlisted in view of their prowess in shipbuilding as well as its financial strength. Both these aspects are key for the turnover for CDPLC.