The Hindu Business Line : Pipavav Shipyard reviewing IPO plan

Mumbai, Sept 30 Pipavav Shipyard, promoted by SKIL Infrastructure, is having second thoughts on going ahead with its proposed $150-million IPO in the wake of the recent tremors on Wall Street that continues to rattle global and Indian markets.

The company, in which Punj Lloyd holds about 24 per cent stake, will be studying the market situation for the next three months before taking a final call on its IPO plans.

“We have not yet shelved our IPO plans, but we are studying the market movements closely. If we go ahead with the IPO, it will happen in the next three months,” Mr Ray Stewart, Chief Executive Officer of Pipavav Shipyard, told Business Line.

OPEN FOR PE

He said in the event of the company not taking up its IPO plans immediately, it will consider other alternatives to raise the money. Without elaborating on the other options, he indicated that there were many investors, both global and Indian, who were willing to invest in the company.

Its present private equity investors include 2i Capital PCC, New York Life Investment Management India Fund, Merrill Lynch International, Deutsche Bank AG and ABN-Amro Asia Merchant Bank.

FUND UTILISATION

The company plans to invest part of the funds to finance its expansion programme that will involve building of more sophisticated and bigger ships. Currently, the shipyard, which became operational recently, builds bulk carriers, with an order book of 22 ships involving a cost of about $1 billion.

“These orders are from foreign ship owners, including 12 from Greek owners and six from Norway,” Mr Stewart said. Pipavav’s present capacity is about 4-6 bulk carriers a year, which will go up to 8-10 later. “Our plan is to mature from bulk carriers to tankers and then to cape size vessels and drill ships,” he said.

OFFSHORE, NAVY FOCUS

The shipyard also plans to have a sharp focus on construction of offshore supply vessels in the light of the booming activities on the offshore oil and gas exploration front. “We are keen on participating in some projects of the ONGC,” according to him.

It is also keen on participating in the Indian Navy’s requirement of vessels. It has sought approval from the Defence Ministry to construct certain categories of ships for the Indian Navy and a Naval team, led by the Chief of Naval Staff, had recently visited the shipyard.

“We expect to get the approval sometime. We will not be involved in building sensitive and sophisticated warships for the navy, but will construct simple ships like cadet training ships and offshore patrol vessels,” he said

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