Mazagon Dock Shipbuilders Limited (MDL) has announced its first international acquisition with a controlling and substantial stake in Colombo Dockyard Plc (CDP) in an all-cash deal of approximately Rs 452 crore, according to a report in The Economic Times.
The proposed acquisition will enable Mazagon to strengthen its position in the ship repair and shipbuilding industry by unlocking operational synergies, enhancing research development capacities and expanding market reach, the Mumbai-headquartered defence shipyard said in a regulatory filing.
Expected to be completed within four to six months, the proposed acquisition is the first instance of an Indian shipyard, both state-owned and private, acquiring a shipyard overseas.
To acquire 51% stake in Lankan ship repair company for Rs 452 crore
“The board of directors of Mazagon Dock Shipbuilders Limited inter alia considered and approved the acquisition of a controlling and substantial stake of Colombo Dockyard by way of an investment not exceeding $52.96 million (approximately Rs 452 crore) considering prevailing exchange rate) in the securities of CDP through a combination of primary subscription and secondary acquisitions from the shareholders of CDP,” the warship builder said.
It supports the company’s long-term growth vision in the shipbuilding and ship repair industry, MDL added.
Located in the Port of Colombo, CDP gives MDL a strategic foothold in the Indian Ocean Region — which is a key maritime corridor. “With this, MDL begins its transformation from a domestic shipbuilder to a regional maritime player with global ambitions,” the company posted on its official X account.
Colombo Dockyard is a publicly listed company incorporated under the laws of Sri Lanka. Engaged in the business of shipbuilding and ship repair for over five decades, the company is listed on the Colombo Stock Exchange.
Benefits for India
According to Captain Jagmohan, Chairman & Managing Director (CMD) of MDL, it is not just an acquisition but a gateway considering Colombo Dockyard’s strategic location.
“This is not just an acquisition, it is a gateway. It marks our first international foray and reflects our ambition to transform into a global shipbuilding enterprise. With Colombo Dockyard’s strategic location, proven capabilities, and strong regional presence, this step will position MDL as a key player in South Asia and lay the foundation for our emergence as a global shipyard,” said Capt Jagmohan.
Echoing the company CMD’s words, an MDL spokesperson said that the Colombo Dockyard offers Mazagon Dock a strong operational foothold in the Indian Ocean Region (IOR), which is one of the most significant maritime corridors in the world.
“With this acquisition, MDL positions itself not only to strengthen its presence in the region (IOR) but also to enhance its competitiveness in the global shipbuilding and marine engineering arena,” the spokesperson added.
Incorporated on June 14, 1974, Colombo Dockyard has manufactured offshore support vessels, cable-laying ships, tankers, and patrol boats for many countries, including Japan, Norway, France, the UAE, India, and several African nations. “It is the only shipyard in Sri Lanka that offers services ranging from in-house design and construction to advanced repair and marine steel fabrication,” the MDL official said.
According to reports, Colombo Dockyard reported losses of LKR 2.48 billion (Rs 70.7 crore) in 2024 and Onomichi Dockyard, which controls the company, had sought financial relief from the Japanese and Sri Lankan governments.
The deal with Mazagon Dock is likely to prove beneficial for Colombo Dockyard. “With MDL’s support, particularly in technology sharing, access to Indian supply chains, and entry into Indian and allied maritime markets, Colombo Dockyard can hope for a financial turnaround and long-term growth,” an MDL official told The Times of India.