Cochin Shipyard to meet part of Rs 1,500 cr expansion via IPO

In order to sustain the growth of ship-repair and shipbuilding, investment in capacity addition was essential, co says

Country's leading shipbuilder Cochin Shipyard (CSL) plans to meet a part of its proposed Rs 1,500 crore expansion project through an initial public offering (IPO), the government said today.

However, it did not specify the time of the disinvestment which has been pending for long.

"CSL plans to meet a part of its expenditure for expansion through IPO," Secretary Shipping P K Sinha told the members of Parliamentary Consultative Committee on Shipping, chaired by Shipping Minister G K Vasan here.

The capacity augmentation of the CSL includes setting up a "new dry dock at the CSL... A ship-repair facility at Cochin Port Trust and ... Offshore fabrication work for ONGC / other operators at a dedicated offshore location," said an official statement.

"The approximate cost for the expansion is likely to be Rs 1,500 crores. CSL hopes to raise a part of this requirement by way of IPO at the time of the disinvestment by Government of India," the statement said.

The financial and technical feasibility report for these projects with the revenue projections would be ready by December 2012, CSL CMD K Subramaniam said during the meeting.

He said in order to sustain the growth of ship-repair and shipbuilding, investment in capacity addition was essential.

Capacity addition at CSL is part of India's target to enhance its global share in  shipbuilding to 5% from the present level of about one%.

"India aims to attain self-sufficiency in ship-repair and emerge as a dominant ship repair centre in Asia", Shipping Minister Vasan said at the meeting.

It aims at raising the share of Indian shipbuilding in the global shipbuilding market to 5% by 2020, he said.

This would make CSL the first state-owned shipbuilder to be listed on the bourses.

CSL's clientele include ABG Shipyard Ltd, India's biggest private shipbuilder, besides Essar Oilfields Services,a unit of the diversified Essar Group and Bharati Shipyard.