Mazgaon Dock to diversify into exports & vessel repairing

State-run warships and submarine builder Mazgaon Dock Shipbuilders (MDS) is aiming to diversify into exports and vessel repairing, and also creating a facility at nearby Nhava, a senior official said Thursday.

The company, which is reportedly aiming to raise up to Rs 850 crore in divestment for the government through an initial public offering (IPO) soon, is completely dependent on the defence ministry for its business at present.

It has an order book of Rs 52,000 crore, including four P-15 bravo destroyers, seven P-17 frigates and five of the remaining Kalvari-class Scorpene submarines.

Its director Capt Rajiv Lath said while the margins for the shipbuilding are capped at 7.5 per cent, the same for repairs and also exports are higher, which makes both the segments endearing from a profitability perspective.

"We are looking for exports of ships, including commercial ships and ship repairs in a big way," he said.

Another company official added that a delegation from Egypt was at the in south Mumbai yesterday to discuss a possible deal and stressed that in the past as well, it has exported ships.

Looking at the thrust given to defence given the geopolitical realities and the country's aspirations at a global stage, the company feels there will be a higher demand for hardware in the future and specifically pointed out to Indian Navy's comments to be a 200-ship strong fleet by 2027 and the order for next generation submarine in the works.

MDS is exploring to utilise its 40-acre land parcel at Nhava, adjacent to the country's largest container port JNPT across the city harbour, which will house both repair and shipbuilding facilities, he said.

The total sea frontage is over 150 metres and there is a deep draft of over 10 metres where container vessels are plying at present, a senior official said, adding that it will require investments of more than Rs 900 crore, which was spent in various developmental works recently.

The official, however, declined to quantify the investments and also clarified that the IPO proceeds will not be used for the expansion.

At present, MDS operates out of a land parcel measuring over 60 acres in what is the financial capital's eastern waterfront. It has been operating from here since 1770, when the British East India Company set it up for repairing ships.

Lath said last of the vessels on order at present will be delivered to the Navy by 2025 and will include one delivery of Scorpene class submarines per year till 2022, starting with 'INS Khanderi' by December this year.

A senior official hinted delivery of the INS Vishakhapatnam (P-15 bravo) may be ahead of the revised timeline of 2021.