L&T Ship Building Ltd’s shipyard at Katupalli, North of Chennai, is scheduled to commence commercial operations in the current quarter, according to the ratings and analysis agency Crisil.
L&T Ship Building is a 97:3 joint venture between L&T and Tamil Nadu Industrial Development Corporation Ltd.
The company was set up to develop a shipyard for the construction and repair of defence and commercial vessels and to set up a minor port with an annual container handling capacity of 1.2 million twenty-foot equivalent units. The project is being set up at Katupalli (Tamil Nadu).
The shipbuilding division will supply vessels to the Indian and foreign navies, and to the Indian Coast Guard; it will also make vessels for commercial use and carry out ship repairs.
The port division will cater to the container cargo of varied industries such as automotive parts, engineering, leather goods, and chemicals.
The total project cost of Rs 3,375 crore is being funded in a debt-to-equity ratio of 75:25. However, there has been an increase in the project cost by Rs 614 crore due to widening of scope.
The cost overrun was primarily funded by L&T in the form of equity. The company has already spent Rs 3,490 crore.
As of June 30, the company had completed 95 per cent of the project.