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IPO-bound GRSE may build bridgesin Kerala, West Bengal

The company that set to open its initial public offering later this month has plans to diversify the business and get into ship repairs.

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The governments of West Bengal and deluge-hit Kerala have approached Garden Reach Shipbuilders & Engineers Ltd (GRSE) to re-construct bridges. The company that set to open its initial public offering later this month has plans to diversify the business and get into ship repairs.

"The government wants us to erect a bridge at Majerhat (Kolkata) and Siliguri. At Kolkata, a bridge can be erected in a period of 15 days. We would be working along with engineers from the government, who would construct the approaches and we will complete bailey bridge," said Rear Admiral (retd.) V K Saxena, chairman and managing director of GRSE.

Last week, two bridges had collapsed in West Bengal, one in Majerhat and the other near Siliguri in Darjeeling.

Speaking on the reconstruction of bridges in a shorter span in Kerala, Saxena added, after a request from Kerala government our team is out to assess the total number of bridges that require reconstruction through us and the approximate costs that would be incurred.

As per Kerala's Public Works Department, the recent floods in the state damaged 218 bridges. Kottayam, Pathanamthitta, Idukki and Thrissur districts have suffered the most. An estimate shows that the state would require to spend Rs 293.3 crore on the battered bridges.

"We see orders by the state governments and other civilian agencies to build bailey bridges as a major opportunity," said Saxena. The other plan of this Kolkata-based company is to diversify or look into the opportunity of ship repairs and refits.

As per another GRSE executive, there are better margins in ship repairs, which is one of the factors for diversifying into this business. At the moment, the company is into shipbuilding, engineering of bailey bridges and engines.

Its present order book of Rs 20,300 crore comprises warships and vessels for the Ministry of Defence, which includes the Indian Navy and the Indian Coast Guard. All these orders have been received through nomination basis. In the recent past, GRSE has an increased competition as the Union government has opened up warship shipbuilding and warship repairs for the private sector.

The union government is divesting its 25% holding in GRSE through an offer for sale and expects to raise over Rs 335 crore. The IPO will open on September 24 for a period of three days. The price band is set at Rs 115-118 per share.

A discount of Rs 5 per share may be offered to the retail applicants and eligible employees. IDBI Capital Markets & Securities and YES Securities are book-running lead managers for the issue.

A NEW OPPORTUNITY

218 
Bridges destroyed in Kerala floods

Rs 293.3 cr 
State would require to spend to reconstruct those bridges

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