India's only profitable listed ship builder Cochin Shipyard Ltd. will build eight shallow water anti-submarine vessels for the Indian Navy after emerging as the lowest bidder for a tender floated by the Ministry of Defence.
The contract for eight vessels at a cost of about Rs 5,400 crore will be completed with the defence ministry after due process, Cochin Shipyard said in an exchange filing today.
“The first vessel is to be delivered in 42 months”, Madhu Nair, chairman and managing director of Cochin Shipyard, told BloombergQuint over the telephone. After that, the state-owned shipbuilder will deliver two vessels every year, he added.
The tender was for 16 vessels, however the lowest bidder was to get an order of a maximum eight vessels.
Cochin Shipyard's order book stood at Rs 3,500 crore before it won this order, Nair said. The company is also building an aircraft carrier which is not included in its order book projections as the contract is still due process, Nair added.
The company had raised Rs 1,468 crore after listing on stock exchanges earlier in August. The issue saw high investor demand with a subscription of 76.2 times the number of shares on offer. Cochin Shipyard will use the proceeds from the share sale to set up a new manufacturing facility.
Shares closed 10.9 percent higher after the announcement, compared to the benchmark BSE Sensex which gained 0.24 percent. The stock price has appreciated 32 percent since listing.
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