India’s Mazagon Shipbuilders to Acquire Colombo Dockyard

India’s state-owned Mazagon Shipbuilders has revealed its proposed acquisition of a controlling stake in Sri Lanka’s Colombo Dockyard. If successful, this will become the first international acquisition by an Indian yard, at a time the country is intensifying efforts to capture a bigger share of the global shipbuilding market.

The deal is valued at $52.96 million, representing at least 51 percent equity in Colombo Dockyard. This stake was earlier held by Japan’s Onomichi Dockyard, which announced plans to divest the ownership in December. Mazagon said that it has signed an agreement with Onomichi, giving a green light on acquisition of its stake. The deal is awaiting statutory and regulatory approvals, added Mazagon in a stock exchange filing on Friday.

Colombo Dockyard is Sri Lanka’s largest shipbuilding and repair facility. However, the yard has been experiencing financial difficulties, exacerbated by losses made on some shipbuilding contracts struck at lower prices before the Covid pandemic. In 2023, the company declared its worst financial performance, with a record loss of about $38 million. On the other hand, Mazagon is almost debt-free and reported revenue of $1.13 billion for the year ended March 2025.

According to Mazagon managing director Capt. Jagmohan, the acquisition of Colombo Dockyard will expand his company’s presence in the Indian Ocean region, strengthening its ability to serve global maritime clients. With over 50 years of experience in shipbuilding and repair, Colombo Dockyard has been able to build a global client base, including major European shipowners. Its current order pipeline is worth $300 million.

The Colombo deal is part of a major expansion drive by Mazagon, which holds the title of India’s top warship and submarine builder. Mazagon has said that its expansion initiative is guided by its growing order book. In a recent earnings call, the company indicated that it is seeing significant tailwinds for defense and commercial shipbuilding owing to the current geopolitical situation. Mazagon projects that its order book will cross $10 billion by 2026 from its current $3.7 billion.