Mazagon Dock Shipbuilders acquires majority stake in Colombo Dockyard for $52.96 million

The deal will include India’s largest shipyard acquiring the shares of Onomichi Dockyard Co. Ltd, which owns a 51% stake in Colombo Dockyard

Mumbai: Mazagon Dock Shipbuilders Limited (MDL) on Friday announced its first international acquisition—a controlling stake in Sri Lanka’s largest and most established shipyard, Colombo Dockyard PLC (CDPLC), in a deal valued at up to $52.96 million ( ₹452 crore).

Mazagon Dock Shipbuilders acquires majority stake in Colombo Dockyard for $52.96 million

The deal will include India’s largest shipyard acquiring the shares of CDPLC’s current majority shareholder, Onomichi Dockyard Co. Ltd, according to a press release. The Japanese company owns a 51% stake in CDPLC. After the acquisition is completed, CDPLC will become a subsidiary of MDL, the press release added.

Mazagon Dock Shipbuilders has a market capitalisation of $15.12 billion ( ₹1,29,254 crore). It reported a turnover of approximately $1.13 billion ( ₹9,660 crore).

Explaining the reason behind the acquisition, Captain Jagmohan, the chairman and managing director of the state-run MDL, said, “With CDPLC’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.”

He added, “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.”

An MDL spokesperson said that the Colombo Dockyard offers MDL a strong operational foothold in the Indian Ocean region, which is one of the busiest and most geopolitically significant maritime corridors in the world. “With this acquisition, MDL positions itself not only to strengthen its presence in the region but also to enhance its competitiveness in the global shipbuilding and marine engineering arena,” the spokesperson added.

Colombo Dockyard has more than five decades of experience in shipbuilding, ship repair, and heavy engineering. The company 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.

However, Colombo Dockyard has been in dire straits for some time. It reported losses of LKR 2.48 billion ( ₹70.7 crore) in 2024, according to Maritime Gateway, a shipping news portal. Onomichi Dockyard, which currently controls the Colombo Dockyard, had sought financial relief from the Japanese and Sri Lankan governments. In December last year, Onomichi Dockyard informed the CDPLC board that it planned to divest its 51% stake in the company.

The takeover by Mazagon Dock Shipbuilders would, thereby, come as relief 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.

Naval experts described the acquisition as a great strategic move by Mazagon Dock. Retired Commodore Rakesh Anand, MDL’s former chairman and managing director, said the company has taken a big leap with the acquisition.

“It is a matter of pride for India. Our global footprint will be visible. The Colombo shipyard is important for ship repairs and shipbuilding. This is the first port after crossing the Suez Canal and is strategically located. A lot of repair activity will happen there, where MDL can now participate,” he added.

A former vice-admiral in the Indian Navy, who requested anonymity, said, “It is a fantastic, strategic move. Along with other players like Adani Ports, who have a stake in the Colombo port, this acquisition complements the other one and gives India a strategic advantage in the maritime space.”