Pipavav Shipyard is coming out with an IPO of 86,850,000 Equity Shares of Rs 10 each at a price band of Rs.55-Rs.60 for construction of facilities for Shipbuilding, Offshore Business and for general corporate purposes.
It is currently constructing the shipyard,on the Indian west coast near Persian Gulf. Once completed the shipyard will be available for ship construction and repairs for a range of vessels as well as the construction of products like offshore platforms, rigs, jackets and vessels for oil and gas companies.
Details of the Issue:
Size of the Issue : 86,850,000 Equity Shares of Rs 10.
Face Value of Rs 10 Per Equity Share.
Price band : Rs.55 – Rs.60 Per Equity Share.
Listing At: BSE, NSE.
The only advantage would be the tax-free status of its SEZ status and lower taxes for the shipyard, being an export-oriented undertaking. It is to be noted that the company has not started commercial production yet, so revenues are not yet generated. Also, the sector is under stress as a result of the global downturn, with no clear signs of revival. It is not going to be a smooth sailing and hence investors can look for better opportunities.
It is better not to invest for listing gains
Pipavav has ambitious plans in long term and is a long term story. However, it would be a better buy after listing around 40 levels.
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