Media reports indicate that Cochin Shipyard (CSL) would invest almost Rs 2,000 crore towards its capacity expansion plan in the coming years by raising funds through an initial public offering (IPO).
The company would raise part of the funds needed for this investment through the proposed IPO. The capacity expansion plan of the firm is part of its ambition to become a leading international shipbuilding and repair yard.
In the short to medium term, CSL may invest in two projects for sustaining its growth momentum. This include international ship repair facility at Cochin Port Trust premises and the expansion of dry-dock facility for underwater repairs of rigs and semi-submersibles, media reports indicate. The company has planned this project assuming that it would be a hedge against the cyclical fortune of the shipbuilding industry.
These projects may be implemented after the firm receives the necessary approvals from the concerned ministries.
In 2007, the firm planned to invest in a high definition dry-dock and had submitted a proposal to finance the project by way of an IPO.
The project was to be partly supported by the Indian Navy. However, we had to defer our plans following the NavyÂ’s reversal of its decision, coupled with the subsequent market downturn.
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