Photo Credit: The Times of India
India’s Mazagon Dock Acquires Colombo Dockyard in $53 Million Strategic Deal
On June 27, Mumbai-based Mazagon Dock Shipbuilders Limited (MDL), India’s leading defence shipyard, signed an agreement to acquire at least a 51% controlling stake in Colombo Dockyard PLC (CDPLC), Sri Lanka’s largest shipbuilding and repair yard, for up to $52.96 million. The deal—MDL’s first ever international acquisition—cements a strategic foothold in the Port of Colombo, a pivotal maritime corridor in the Indian Ocean Region.
The acquisition will involve both primary capital infusion and secondary share purchases from existing stakeholders, including Japan’s Onomichi Dockyard, which currently holds a 51% stake. The transaction—valued at approximately ₹452 crore (USD 52.96 million)—is subject to customary regulatory approvals in India and Sri Lanka and is expected to close within the next four to six months.
Mazagon Dock, a public sector undertaking under India’s Ministry of Defence, specialises in constructing and repairing naval vessels, including warships and submarines. CDPLC, founded in 1974, operates four graving dry docks and is accredited with ISO 9001:2015 certification. Although CDPLC reported losses of approximately LKR 2.48 billion in 2024, it maintains an order pipeline exceeding $300 million for vessels such as cable-laying ships and offshore support vessels.
This deal aligns with India’s Maritime Amrit Kaal Vision 2047 and is seen as a strategic pivot to bolster maritime infrastructure, shipbuilding capabilities, and regional influence. The location of Colombo Dockyard near major shipping lanes offers operational synergies and logistical advantages, enabling MDL to support India’s naval operations and extend ship repair services to regional partners.
The acquisition is also interpreted as a counterbalance to China’s growing presence in the region, particularly following its investment in ports such as Hambantota and strategic vessels activity. By integrating CDPLC’s technical expertise and existing order backlog with MDL’s defence capabilities and supply chain, India anticipates both commercial gains and enhanced maritime influence.
Colombo Dockyard, a publicly listed Sri Lankan company, has a longstanding history in military and commercial vessel construction, collaborating with Japan’s Onomichi Dockyard since 1993. Its operations include ship repair, newbuilds, and offshore engineering. For MDL, the acquisition opens opportunities to diversify service offerings, optimize repair capacity, and access new export markets across South Asia, the Middle East, and Africa.
Despite CDPLC’s recent financial challenges, the infusion of capital and technology from MDL is expected to restore profitability and offer long-term growth. Observers note, however, that regulatory approvals and potential geopolitical pushback—given Sri Lanka’s historical engagement with China—could influence the timeline.
MDL’s $53 million acquisition of Colombo Dockyard represents a calculated maritime strategy: augmenting India’s shipbuilding and defence repair infrastructure while securing a strategic outpost in the Indian Ocean. More than a corporate milestone, this move positions India to better project its naval capabilities and strengthen regional cooperation at a critical maritime juncture.
