State-run Cochin Shipyard (CSL), which is building the first entirely Indian-made aircraft carrier, will sell shares through an IPO to raise as much as ₹1,470 crore to help fund a ₹2,800-crore expansion plan for constructing larger sophisticated ships and strengthen its ship repair business.

The share-sale involves 34.984 million equity shares of ₹10 each, comprising a fresh issue of 2.2656 crore shares and the Central Government’s stake of 1.1328 crore shares. The share-sale will open on August 1 and close on August 3, in a price band of ₹424-432 an equity share.

“Proceeds from the share-sale will be utilised by CSL to part-finance the setting up of an international ship repair facility at nearby Cochin Port Trust as well as a new dry dock, the firm’s third, to facilitate the construction of larger ships and underwater repairs of rigs and semi-submersibles,” Madhu S Nair, Chairman and Managing Director of Cochin Shipyard, said at a conference in Mumbai on Tuesday.

Dry docks are used for construction, maintenance and repair of ships.

Big orders, bids CSL, a debt-free company, will be the first of India’s five State-run shipbuilders to be listed, allowing the firm to convert its worth into share value. There are only three listed private sector shipyards in India—ABG Shipyard, Bharati Shipyard and Reliance Defence and Engineering (RDEL). L&T Shipbuilding, which runs a shipyard at Kattupalli in Ennore near Chennai, is not listed but is part of L&T, a listed company.

CSL, a profitable and dividend-paying company, is currently executing orders worth ₹3,000 crore, comprising four passenger-cum-cargo ships for the Andaman & Nicobar Administration, one technology demonstration vessel for the DRDO and the balance 40 per cent work on Phase II of the aircraft carrier, apart from on-going ship repairs.

Nair said that CSL has submitted bids for projects worth ₹12,000 crore, three for the Indian Navy and one for the Ministry of Home Affairs.

The expansion also involves expanding its ship repair capacity, a high-margin business in which the firm earned ₹550 crore in the year ended March 2017, by undertaking repairs of some 80-100 ships. The new ship repair facility will help Cochin Shipyard repair another 80 mid-sized ships a year, Nair said.

The firm, India’s biggest State-owned shipbuilder by capacity, now has the capability to build vessels of up to 1.1 lakh deadweight tonnes (DWT) and repair ships of up to 1.25 lakh DWT. Deadweight tonne is a measure for the total weight-carrying capacity of a ship.

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