The Hindu Business Line : ABG Shipyard fixes IPO price at Rs 155-185

Mr Rishi Agarwal, Managing Director, ABG Shipyard Ltd, at a press conference in Mumbai on Wednesday to launch the company's IPO, which is scheduled to open on November 18 - Shashi Ashiwal

Mumbai , Nov. 9

ABG Shipyard's initial public offering (IPO) of 85 lakh equity shares has been priced Rs 155-185 per share.

If fully subscribed, it hopes to raise Rs 132-157 crore.

The issue opens on November 18 and closes on November 24.

The company has reserved two lakh equity shares for its employees. Of the balance, 60 per cent has been reserved for allotment to qualified institutional buyers (QIB) on a discretionary basis, 10 per cent for non-institutional buyers on a proportionate basis and 30 per cent for retail investors.

The net issue will constitute 16.3 per cent of the fully diluted post-issue paid-up capital of the company. However, there is no dilution of the promoter's capital, which will stand at 59.6 per cent post-IPO.

The company manufactures marine ships, including bulk carriers, deck barges, interceptor boats, tugs and offshore vessels. "We can build all kinds of ships up to a length of 150 meters," said Mr Rishi Agarwal, Managing Director, ABG Shipyard.

"India is the next destination after Japan, Korea and China, where shipbuilding will boom and ABG is ready to cash in on the opportunities," said Mr Agarwal.

The proceeds from the issue will be used to set up a shipyard; the company's second at Dahej in Gujarat. The new shipyard, built at a cost of Rs 400 crore, will have capacity to build vessels up to 1.2 lakh DWT. "The new shipyard will be commissioned in 2010, though we will start making ships there from 2008 onwards," he said.

The company has built 88 ships in the past 14 years for domestic and international buyers. "Modular technology in addition to the ship-lift facility at our yard at Magdala (near Surat) allows us to simultaneously work on 23 ships," Mr Agarwal said.

The company has orders worth Rs 1,300 crore for 27 ships, which are under construction, he said.

The company reported Rs 46.7 crore gross profit with Rs 216 crore income during the first half of the current fiscal.

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ABG Shipyard fixes IPO price at Rs 155-185