Pipavav Shipyard Ltd – PSL is setting up the country’s largest state-of-the-art private sector shipyard in Gujarat for construction and repairs of a range of vessels. The total amount to be invested in the yard stands at Rs25bn, of which Rs19.8bn has already been invested.
PSL is jointly promoted by Nikhil / Bhavesh Gandhi and Punj Lloyd Group.
Current IPO Details:
Face Value – Rs 10
Price Band – Rs 55 to Rs 60
Retail – 25,455,068 Equity Shares available for allocation
Reasons to Avoid Investing in Pipavav Shiyard IPO:
The Gandhi promoters of Pipavav are facing are criminal charges and manipulation of stock prices charges.
The promoters of PSL have vast experience in development of infrastructure projects. However, they have not ventured into anything connected to shipbuilding in the past.
PSL’s reported order book currently stands at Rs44.5bn. This includes orders
for 22 Panamax vessels from foreign companies and 12 OSVs from ONGC. However, as per our understanding from the company’s RHP, a large percentage of these orders are under renegotiation or arbitration.
Poor Financial Track Record – The company is expected to report an EPS of Rs 0.20 for FY10 and Rs 4.5 for FY11 and FY12.
As compared to ABG and Bharati Shipyards, PSL looks expensive on almost all parameters such as P/E, P/BV and EV/EBITDA, etc. Even on a replacement cost basis.
Gandhis have had a passion in the past to takeover unknown finance companies JPT Securities and later merge their projects using another company [Awaita Properties Private Limited] and thus seek backdoor listing. Read Draft RHP Page 239. Such list of companies go on and on.
Looks like Gandhi’s are alumni of Ambani school of Manipulation and Malpractices 🙂
Every Broking House is raising questions on Stock Price Rigging by Shady promoters Mr. Gandhis.
We strongly recommend VALUE investors to stay away from Pipavav Shipyard IPO.