The IPO-bound public sector unit Cochin Shipyard today said it will be investing Rs 3,100 crore over the next five years for capacity expansion in both ship building as well as repairs side.
The IPO-bound public sector unit Cochin Shipyard today said it will be investing Rs 3,100 crore over the next five years for capacity expansion in both ship building as well as repairs side.
"We are investing Rs 1,800 crore for a dry-dock, Rs 970 crore on the ship repair side and Rs 300 crore to augment the current capacities over the next five years," chairman and managing director Madhu S Nair told reporters here.
The company, aiming to raise up to Rs 1,468 crore through its maiden share sale early next month, is enhancing its shipbuilding capabilities by creating a 310- metre dock which can accommodate bigger vessels, including LNG carriers that would be required by the nation in future, Nair said.
The yard, which is building the country's maiden indigenous aircraft carrier at present, already has two docks of 250 metres and 270 metres, he said.
The state-run firm plans to create an international ship repair facility within the yard, for which it has already leased a 42 acre plot from the Cochin Port Trust, he said, adding it will increase its capacity by over 60 per cent.
At present, the shipyard is forced to reject over 20 ships per year sailing in for repairs due to capacity constraints, he said.
The PSU clocked revenue of Rs 2,059 crore in FY17, with 74 per cent contribution from the ship building side and the rest from repairs. The profit after tax was Rs 312 crore.
The company is coming out with its IPO in the first week of August and fixed a price band of Rs 424-432 per equity share of Rs 10 face value. The government is divesting 11.32 million shares through an offer for sale while the company is issuing 22.65 million fresh shares, that should ensure the government stake comes down to 75 per cent post-issue.
Nair said the company has a cash balance of Rs 1,600 crore at present, but given the volatile nature of the ship building business, would like to preserve it and not go for huge borrowing programmes.
The PSU's orders, including 40 per cent of the phase- II of the indigenous aircraft carrier and four other vessels, stood at Rs 3,000 crore at present, he said, adding it is also bidding for four tenders to be issued shortly by various arms of the government.
Asked about the increased competition from private sector players like the Anil Ambani Group, Nair said the company is "comfortable" taking them on and has never taken any grant from the government.
The government accounts for almost 100 per cent of the revenue at present even though the company has in the past worked for foreign companies or governments, he said.
It is looking at the policy thrust on inland waterways as a big opportunity and has tied up with a state-run shipyard located near Kolkata to create a joint venture which will manufacture vessels for low drafts, he said.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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