Pipavav Defence soars on nod for preferential issue to strategic investor

Pipavav Defence and Offshore Engineering Company surged 9.02% to Rs 61.65 at 11:19 IST on BSE after the company's board approved issuing 8.18 crore equity shares on preferential basis to an international strategic investor at a minimum Rs 110 each.

The company made this announcement during trading hours today, 22 November 2011.
Meanwhile, the BSE Sensex was up 184.88 points, or 1.16% to 16,130.98.
On BSE, 46.81 lakh shares were traded in the counter as against average daily volume of 26.29 lakh shares in the past one quarter.
The stock hit a high of Rs 62.20 and a low of Rs 55.65 so far during the day. The stock had hit a 52-week low of Rs 50.65 on Monday, 21 November 2011. The stock had hit a 52-week high of Rs 92.60 on 13 September 2011.
The stock had underperformed the market over the past one month till 21 November 2011, declining 33.59% compared with the Sensex's 5% fall. The scrip had also underperformed the market in past one quarter, falling 8.79% as against 1.21% decline in the Sensex.
The mid-cap ship builder has an equity capital of Rs 665.80 crore. Face value per share is Rs 10.
Pipavav Defence and Offshore Engineering Company said the proposed preferential issue to the strategic investor will be made at a price not less than Rs 110 per equity share or price to be determined pursuant to formula prescribed as per the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, whichever is higher.
Pipavav Defence and Offshore Engineering Company said the aforesaid investment by the strategic investor in the company will be a long term strategic investment in the company. The investor will initially subscribe to 5% of the paid-up capital of the company and within specified time will increase its holding in the company to upto 10% of the paid-up capital of the company, the company said in a statement. The company further added the investor is a leading and extremely reputed global conglomerate with strong interest in defence sector. The investor will bring in critical technology required for manufacture of complex and critical equipments, systems required by armed forces i.e. navy, army and air force. The investor will have a right to nominate one director on the board of the company, the company added.
Pipavav Defence and Offshore Engineering Company also said that it has successfully delivered "The Golden Suek", a 74,500 DWT Panamax bulk carrier, to Golden Sapphire Inc, nominated by Golden Ocean Group, a company headquartered in Norway.
Pipavav Defence and Offshore Engineering Company reported a net profit of Rs 9.41 crore in Q2 September 2011 compared with a net loss of Rs 2.20 crore in Q2 September 2010. Net sales jumped 155.7% to Rs 449.15 crore in Q2 September 2011 over Q2 September 2011.
Pipavav operates the largest shipyard in India, covering over 200 hectares with approximately 720 metres of sea front and 685 metres of outfit quay. The company also has a license to build warships for the Indian Navy.