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Updated - May 02, 2026 09:42 pm IST - Mumbai
Shipping Corporation of India’s Swarna Pushp undergoing repairs at the Colombo Dockyard. | Photo Credit: Special Arrangement
In India’s first international shipyard acquisition, Mazagon Dock Shipbuilders Limited (MDL) last month acquired a 51% controlling stake in Sri Lanka’s Colombo Dockyard PLC (CDPLC), strengthening India’s maritime presence in the Indian Ocean Region. The process, which began in January 2025, concluded after over a year of regulatory and procedural steps. The move is seen as both strategically and commercially significant for both countries.
“This acquisition holds long-term significance for bilateral ties. CDPLC is a strong company with sound business practices. The move is mutually beneficial and has generated goodwill in Sri Lanka. We see significant synergies,” said Captain Jagmohan, Chairperson and Managing Director of MDL.
Mazagon Dock, a defence public sector undertaking, has a market capitalisation of more than ₹1.1 lakh crore. It recently reported consolidated revenue of ₹13,006.31 crore, reflecting a 14% year-on-year growth.
The acquisition initially triggered concerns in Sri Lanka about control over strategic assets and that CDPLC will be used for India’s defence manufacturing. These apprehensions have since eased, with the deal contributing to a turnaround in CDPLC’s financial position.
By January 2025, Colombo Dockyard PLC was in a tough situation after its long-time majority shareholder, Japan’s Onomichi Dockyard Company Limited, decided to exit. An Expression of Interest was issued, attracting multiple bidders, with MDL emerging as the successful one.
On 27 June 2025, MDL’s Board approved an investment of ₹452 crore and authorised a tripartite agreement with CDPLC and Onomichi. The proposal underwent scrutiny by the Indian Ministry of Defence and received in-principle approval from the Defence Minister, followed by clearance from the Department of Investment and Public Asset Management under the Ministry of Finance.
MDL subsequently completed the acquisition through the Colombo Stock Exchange, with a total outlay of about $53 million (₹452 crore). On 11 April 2026, the company informed shareholders that the deal had been completed, effective 7 April 2026. Captain Jagmohan assumed charge as Non-Executive Chairman of CDPLC.
Soon after, MDL infused an additional $40 million into the dockyard.
The acquisition has expanded CDPLC’s access to international markets, Indian clients, and new contracts. The dockyard has secured its largest-ever shipbuilding order—two advanced cable-laying and repair vessels for France’s Orange Marine, valued at around $150 million.
It has also signed an MoU with the Dredging Corporation of India for vessel repairs.
MDL has clarified that operations at Colombo Dockyard will remain commercial, addressing concerns about defence-related activities. For India, the deal offers both commercial gains and a strategic foothold in Sri Lanka’s largest shipyard.
With a presence at Colombo Port, MDL plans to expand ship repair operations, a high-margin segment with strong employment potential through ancillary industries.
The company also sees opportunities in Sri Lanka’s Dockyard General Engineering Services (Pvt) Ltd, which provides engineering and infrastructure services across marine, petrochemical, and power sectors.
“Employment will rise as ancillary industries grow. There is also strong potential in large storage tank construction,” Captain Jagmohan said.
MDL is exploring opportunities at Trincomalee Port—one of the world’s largest natural harbours—and at Hambantota Port, a key deepwater hub on major shipping routes that was leased to a Chinese joint venture in 2017 for 99 years due to Sri Lanka’s debt repayment issues.
For Sri Lanka, the acquisition comes at a critical time. Colombo Dockyard had faced years of financial strain due to multiple global disruptions and was burdened with heavy debt. The exit of Onomichi left it seeking a strategic investor, with around 3,000 livelihoods at stake.
“For us, this means access to the Indian market, skill development for our workforce, expanded R&D capabilities, and improved access to credit,” said Thimira Godakumbura, Managing Director and CEO of Colombo Dockyard.
With fresh capital infusion and new orders, the company expects revenue to grow by 20% this financial year.
Mr. Godakumbura also highlighted the potential for skill development through collaboration with India’s maritime ecosystem and premier institutions.
Initial concerns about defence-related activities have subsided, he added. “Over the next three years, we are focused on profitability and growth. This partnership can become a flagship investment and a model for future collaborations,” he said.
Published - May 02, 2026 09:31 pm IST
shipbuilding / economy, business and finance / Sri Lanka
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