The Hindu Business Line : Western India to change hands?

Western India Shipyard counter has been buzzing with activity of late in view of Street expectation that the sale of the company is imminent. The loss-making company has been put on the block by a consortium of banks as a functional asset and operational entity.

L&T, Aban Loyd and Wartsila group are understood to be in the fray for the company.

According to market estimates, the valuation for the company, which has a 20,000 TCL floating dry dock for shipbuilding and a wet repair berth - both operational in Goa, could be between Rs 200 crore and Rs 250 crore for its unique location advantage and total area of land. The proposed acquirers are stated to be offering a value of around Rs 25 per share. The stock is currently trading at Rs 7.23.

According to market sources, huge accumulation is currently on by a group of smart investors, who feel that the new acquirer would scale up the operation and in the long term it may turn out to be a multibagger. The stock has gained 16 per cent in the last one week and over 42 per cent in the last one month. It average traded quantity for the last fortnight stands at 6.28 lakh shares.

During the year ended March 31, 2006, the company had lost 181 working days on account of adverse weather condition and capital repair to dry dock. During the quarter ended June 30, 2006, it further lost 60 working days for the same reasons. Now after the dry dock repair and conversion of the incomplete graving dock into a slipway (also capitalisation of it), the company's operational strength has gone up significantly.

Jayanta Mallick

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