The public sector Cochin Shipyard Ltd has proposed to float an IPO to raise funds to augment its capacity expansion plans.
The company proposed to raise Rs 400-500 crore tentatively by offering 2.2 crore shares. It is approaching the Union Government for the necessary approval to issue fresh shares to fund the expansion plans, Commodore K. Subramaniam, Chairman and Managing Director, told reporters here on Friday.
New facilities planned
Asked whether the general downturn being experienced in the ship building sector is conducive for the IPO, he said by the time Cochin Shipyard gets the necessary approval the market may improve. It is expected that the industry, which is going through a phase of low charter rates and oversupply, will turnaround by 2015, he said.
The yard, he said, plans to set up new facilities and expand its operations to sustain the growth momentum in future. The total investment in the new facilities is expected to be in the range of Rs 1,500-2,000 crore, which will be funded partly by way of equity and debt.
The expansion plans included a new large dry dock at the existing CSL estate capable of docking offshore oil rigs and semi submersibles ; developing a ship repair facility at Cochin Port Trust; and taking up offshore fabrication work for ONGC and other operators at a dedicated offshore location.
It has already taken over land and workshop facilities on lease from Cochin Port Trust to set up the international ship repair facility at a cost of Rs 487 crore.
Net profit
Referring to the financial performance, the CMD said the yard’s turnover for 2012-13 was Rs 1,554 crore compared to Rs 1,405 crore in 2011-12.
The profit before tax and net profit was Rs 276 crore and Rs 185 crore in 2012-13 compared to Rs 253 crore and Rs 172 crore in 2011-12.
Order book position
The order book position as on June 21 is 25 ships consisting of 20 fast patrol vessels, 3 offshore support ships for Indian and foreign owners and 1 buoy tender vessel for the Department of Lighthouses and Lightships.
Subramaniam pointed out that the aircraft carrier of the Indian Navy will be floated on August 12 by the Union Defence Minister A. K. Antony.
It will be taken to the repair dock for installing ski-jump on the vessel after which weapon systems and trials would be held.