MUMBAI: Pipavav Shipyard Ltd proposes to enter the capital markets with a public issue of 8,68,50,000 equity shares of Rs 10 each through book building process. It has already filed papers for the proposed issue with the SEBI for the purpose.

Pipavav Shipyard is currently constructing

The shipyard will have an estimated investment of Rs 2,888 crore. Upon completion of construction, the Pipavav Shipyard will be capable of ship construction and repairs for a range of vessels of different sizes and types, as well as the fabrication and construction of offshore platforms, rigs, jackets and vessels, for use by oil and gas companies in their exploration and production activities.

The company proposes to part finance this project cost with the help of Rs 1,248.67 crores (including premium) raised through equity already issued and term loans from banks and financial institutions to the tune of Rs 935.2 crore.

Funds raise from the proposed IPO will go in meeting the balance funding requirement.

JM Financial Consultants, Citigroup Global Markets India and Enam Securities are the book running lead managers to the issue.

SBI Capital Markets, Kotak Mahindra Capital and Motilal Oswal Investment Advisors are the Co-BRLMs for the issue.

The company is constructing the Pipavav Shipyard based upon the principle of concurrent shipbuilding, which involves the production of vessels while simultaneously completing construction of the shipyard.

The construction of the Pipavav Shipyard is being conducted on an owner-managed basis. It has agreements with three international shipowners for the construction of 26 Panamax bulk carriers of 74,500 DWT each for delivery from 2009 to May 2012 at an aggregate contract value of $1,063.12 million (Rs 42,992 million).

Pipavav Shipyard was originally promoted by SKIL Infrastructure and Grevek Investments. Punj Lloyd has now joined as a co-promoter through its acquisition of 129,361,538 shares of the company.