Punj Lloyd buys into Pipavav Shipyard

The New Delhi-based infrastructure major Punj Lloyd has acquired a 25.1% stake in Pipavav Shipyard (PSL) for Rs 403 crore. The deal, done through preferential allotment, is seen as a strategic investment by Punj Lloyd to support the growth of its business in the offshore sector.

“This investment will provide us access to capabilities to operate in this market more effectively,” said a company spokesperson. As per industry estimates, growth in the shipyard industry is expected to be over 30% per annum in the next few years.

The proposed shipyard, spread over 725 acres of land, is located on the west coast of India along the Dubai-Singapore sea route. It has 175 acres of developed waterfront land and confirmed orders worth $358 million and a letter of intent for another $513 million.

The whole project will be completed within 10 years in three phases. Once completed, PSL is expected to be the largest shipyard in India and one of the 10 largest in the world. Even before the deal, PSL had an association with Punj Lloyd. Last year, PSL had roped in the Singapore company SembCorp as a strategic partner. Recently, SembCorp?s engineering and construction business was acquired by Punj Lloyd and was renamed Sembawang.