Pipavav Shipyard to raise over Rs 550cr through IPO

Pipavav Shipyard, which plans to raise over Rs 550-crore through an initial public offering, is likely to enter into the capital market by September 16, a source close to the development said.

The IPO would consist of 8.54 crore equity shares of Rs 10 each and the proceeds would be used to part-fund construction of facilities for shipbuilding and ship repair, the source said.

The proceeds would also allow the company to enter into the offshore business used in the exploration and construction of oil & gas companies.

The IPO, in which the promoters will dilute around 10-12 per cent stake, will be the first in the line from a ship-making firm in the recent past.

The commercial production at the Pipavav shipyard, located near Bhavnagar in Gujarat, has started in April this year. Construction of four vessels are in full swing and the first of the lot would be delivered by April next year.

Apart from this, Pipavava Shipyard is also working on the offshore yard and installing two goliath cranes.

The shipyrad was originally promoted by SKIL Infrastructure and Grevek Investments. Punj Lloyd later joined as a co-promoter.

JM Financial, Citigroup Global and Enam Securities are the book running lead managers to the issue.