Seeking to broaden its presence in the defence sector, the Mahindra group is in talks to acquire a 26-30 per cent stake in India’s largest private sector shipyard, Pipavav Defence & Offshore Engineering Company.
Pipavav Defence’s board will meet to approve the stake sale soon. Following the sale, the companies will also make an open offer to Pipavav Defence’s shareholders, said sources close to the development.
A deal is expected to be announced following the board approval, said the sources, on condition of anonymity.
When contacted, the Mahindra Group spokesperson declined to comment terming it as speculation. Calls to Nikhil Gandhi's mobile went unanswered.
Pipavav Defence, founded by Nikhil Gandhi, had said in 2010 that it was selling 26 per cent to a strategic investor. But the deal did not go through.
Equal stakeIf the deal goes through this time, both the Mahindra Group and Pipavav will have an equal stake in the company. Mahindra will also get two seats on the board of Pipavav Defence.
Started as Pipavav Shipyard Ltd, the company came out with an initial public offering in September 2009, and listed on both the BSE and NSE on October 9 the same year.
A year later, it was granted an industrial licence by the government, permitting it to build strategic and defence vessels.
In 2011, the company changed its name to Pipavav Defence & Offshore Engineering Co. Ltd. During the same year, it also got a ₹200-crore investment from Swedish defence firm Saab AB.
The company has facilities to build warships, submarines and LNG carriers.
According to earlier media reports, Mahindra & Mahindra, Hero group and a French shipbuilder were in separate discussions to buy about 20 per cent in the company.