Pipavav says no talks to sell stake to Mahindra

Earlier, reports had said Hero Group, a French group was also interested in buying a stake

Pipavav Defence & Offshore Engineering on Thursday denied it was in talks to sell a stake to Mahindra & Mahindra.

It was reported that the techonology-to-automative conglomerate Mahindra would purchase a stake in Pipavav for about Rs 3,000 crore ($481.15 million), in a phased transaction that would eventually see it own a majority share.

"There are no negotiations/agreements which the company has entered into which requires disclosure under clause 36 of the listing agreement," Pipavav said in a regulatory statement.

Earlier this month, the Economic Times reported that Indian motorcycle maker Hero Group, as well as French shipbuilder DCNS, had begun talks to buy a controlling stake in Pipavav, which operates facilities for shipbuilding, repairs and engineering.

Companies are rushing to expand into India's defence sector, which is expected to grow rapidly as the government spends billions to modernise its armed forces, in part by developing a domestic industry that replaces the need for imported equipment.

Shares in Pipavav were trading 5% higher at 3.10 pm on Thursday. The stock has jumped more than 30% since the start of the week.

($1 = 62.3500 rupees)