Sembcorp may hike stake in Pipavav Shipyard project

Singapore group may invest over Rs 1,000 crore in the project.

Singapore-based utilities and marine group SembCorp is aiming to hike its stake in Pipavav Shipyard to 15 percent. Currently, the company holds close to 5% and is aiming to pick up another 10%, sources close to the development told Business Standard.

The current valuation of Pipavav Shipyard project is pegged at Rs 8,000 crore. The company Pipavav Shipyard Ltd. (PSL) is also planning an IPO. SembCorp will invest over Rs 1,000 crore by buying out stake of Nikhil Gandhi promoted SKIL, which holds close to 23 per cent in the project, sources said.

Pipavav Shipyard, which has the second largest dry dock in the world after Hyundai Dry Dock in Korea, is looking to hit the capital markets by September this year with an initial public offer of about Rs 1,250 crore.

Currently, SKIL and Punj Lloyd Ltd hold close to 48% in Pipavav Shipyard while 10% is held by Indian institutional investors including IL&FS and IDBI. The remaining 48% has been picked up by FIIs which includes Blackstone, Deutsche Bank and Standard Chartered.

The construction of the Rs 2,370-crore Pipavav Shipyard located in Gujarat is likely to be completed by October 2008. On completion it is expected to have the capacity to build and repair vessels of up to 4 lakh DWT.

Meanwhile, Pipavav Shipyard has started work in the offshore segment in a big way through its 100% subsidiary Pipavav Offshore. The company will pump in Rs 1600 crore for setting up oil platforms, deepwater rigs, proprietary design, jack-ups and offshore support vehicles.

Offshore revenue will contribute 50% of the total revenue of Pipavav Shipyard by 2011-12, said sources.