Government-run Cochin Shipyard Ltd (CSL) is planning to raise around Rs 800 crore through an initial public offering (IPO) to fund its expansion and for capital restructuring. The plan is awaiting Cabinet approval, according to a senior official in the shipping ministry.
The official said if the Cabinet clears the proposal, CSL will be the first state-owned shipyard to be listed. The other government-owned shipyards include Hindustan Shipyard, Mazagon Dock, Goa Shipyard, Garden Reach Shipbuilders and Engineers, Hooghly Dock and Port Engineers and Central Inland Water Transport Corporation.
The proposed expansion plan of CSL includes expanding the current shipbuilding and repair facilities.
At present, the yard builds fighter carriers for the Indian Navy. The IPO proceeds would be used to create additional facilities to construct offshore vessels and tugs, which will ensure better margins. Part of the money would be used for capital restructuring, said the official.
The Centre recently awarded the mini-ratna status to CSL. This would allow it more financial and operational autonomy, the official added.
CSL, which became operational in 1978, has two dry docks— the first can build ships with capacities of up to 110,000 tonnes and the second can repair vessels with capacities of up to 125,000 tonnes.
The yard’s turnover trebled to Rs 720 crore in 2006-07 from Rs 235 crore in 2002-03, while its net profit increased to Rs 58 crore in 2006-07 from Rs 18 crore in 2005-06. The shipyard’s current order book stands at more than Rs 2,000 crore.