Pipavav Shipyard awaits SEBI nod for IPO

Pipavav Shipyard, PSL has bagged India's largest ship building order of USD 1.06 billion for 26 Panamax Bulk carriers. The company has entered into agreements with three international ship owners for the construction of these bulk carriers (including options for four ships which have been exercised) of 74,500 DWT each.

These ship owners are Golden Ocean Group Limited (Norwegian Group, Norway), SETAF s.a.s (Bourbon Group, France) and AVGI Maritime Services S.A. (Kyrini Group, Greece).

In an interview with CNBC-TV18, Nikhil Gandhi, Chairman, Pipavav Shipyard said that the first delivery of the bulk carrier would be by March 2009 and the balanced by May 2012.

The aggregate DWT of vessel construction orders in order book is approximately 1,937,000 DWT.

PSL has received initial payments from ship owners aggregating USD 150.62 million (Rs 6, 091.1 million). These contracts have an aggregate face value of approximately USD 1,063.12 million (Rs 42,992.6 million).

Pipavav Shipyard is currently constructing a shipyard complex at Pipavav, on the west coast of India adjacent to the maritime sea lane between the Persian Gulf and Asia. The Shipyard will have an estimated investment of Rs 2,888 crore.

Pipavav Shipyard will be capable of ship construction and repairs for a range of vessels of different sizes and types, as well as the fabrication and construction of offshore platforms, rigs, jackets and vessels, for use by oil and gas companies in their exploration and production activities.

The company proposes to part finance this project cost with the help of Rs 1,248.67 crore (including premium) raised through equity already issued and term loans from banks and financial institutions to the tune of Rs 935.2 crore.

To meet the remaining funding requirement, Pipavav Shipyard proposes to enter the capital markets with a public issue of 86,850,000 equity shares of Rs 10 each through 100% book building process. It has already filed DRHP with SEBI for the purpose.

Gandhi also added that the company has already signed Pre-IPO placements and waiting for SEBI nod for this IPO.

JM Financial Consultants Pvt. Ltd, Citigroup Global Markets India Pvt. Ltd and Enam Securities Pvt. Ltd are the book running lead managers for the Issue. SBI Capital Markets Ltd, Kotak Mahindra Capital Co. Ltd and Motilal Oswal Investment Advisors Pvt. Ltd are the CO-BRLMS for the Issue. IL&FS Investsmart Securities Limited is Advisor to the proposed offerings. Punj Lloyd holds nearly 25% stake in Pipavav Shipyard.