New Delhi: Mahindra group is looking to acquire 25-30 per cent stake in Pipavav Defence, India's largest private shipyard, based in Gujarat. Following media reports, Pipavav Defence & Offshore Engineering Company Ltd rallied as much as 16.34 per cent in trade on Thursday.
Sources said the board of Pipavav Defence will meet on Friday to approve a preferential allotment of shares to the Mahindra group.
After a preferential share offer, the Mahindras and Gandhis (current promoters of Pipavav) were likely to hold equal stake and an open offer would be made to the shareholders of Pipavav Defence, a banker said. The Gandhi family owns a 45 per cent stake in the company.
If the deal goes through, the Mahindras will invest about Rs 1,000 crore in the company, valuing Pipavav Defence at about Rs 4,000 crore.
Once completed, the deal would raise Mahindra to the very top of the value chain in the Indian defence sector. The deal gives Mahindra the size and scale required to execute more advanced projects and it would also be well placed to bring a foreign defence firm to partner it in bidding for India's defence modernisation plans.
Besides Mahindra, Larsen & Toubro, which has a shipyard in Tamil Nadu, was also in the race to buy a stake in the shipyard. The deal by the company got the approval because of its better offer and a promise to take the company to the next level.
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