Pipavav Defence jumps on executing SPA with shareholders of Conceptia

Pipavav Defence and Offshore Engineering is currently trading at Rs 68.25, up by 1.50 points or 2.25% from its previous closing of Rs. 66.75 on the BSE.

The scrip opened at Rs. 68.05 and has touched a high and low of Rs. 69.20 and Rs. 67.75 respectively. So far 109768 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 119.95 on 30-Aug-2010 and a 52 week low of Rs. 62.05 on 08-Dec-2010.

Last one week high and low of the scrip stood at Rs. 77.00 and Rs. 65.50 respectively. The current market cap of the company is Rs. 4444.20 crore.

The promoters holding in the company stood at 45.00% while Institutions and Non-Institutions held 20.11% and 34.90% respectively.

Pipavav Defence and Offshore Engineering has executed a share purchase agreement (SPA) with shareholders of Conceptia for acquiring 25.50% of the present paid-up share capital of Conceptia. The company proposes to own 51% equity stake in Conceptia Software Technologies (Conceptia), partly by acquisition of shares from existing shareholders of Conceptia and partly by subscribing to the new shares to be issued by Conceptia. The company has also executed a share subscription and shareholders' agreement with Conceptia agreeing to further subscribe to new equity shares of Conceptia in one or more tranches. Post the said subscription, the aggregate shareholding of the company in Conceptia will be 51%.

Conceptia is a Ship Design, engineering and consulting firm. Conceptia also provides CAD services and markets engineering solutions. It is headquartered in Bengaluru and has offices in Delhi, Cochin and United Arab Emirates. It also has a subsidiary in Singapore for marketing its services and products in Asia Pacific region. Conceptia has inter-alia expertise in preparation of detailed designs and 3D modeling for Ships and offshore oil & gas assets. The above said acquisition will bring synergy and integration which will enhance the growth of both the companies in the defence and offshore oil & gas sector.

The company has also received approval for the conversion of the existing wet basin of the company into the 2nd dry dock (The Project). The Project would enhance the company's capabilities to cater to growing defence sector demand both within and outside the country. For the Project, the company has got approval for raising of long-tem debts upto Rs 1,300 crore out of which Rs 1,000 crore have been approved by lenders while remaining Rs 300 crore are under the process of syndication. The company has also commenced construction process of warships i.e. Naval Offshore Patrol Vessels (NOPVs) and has signed design engineering contract with a company under the aegis of Ministry of Defence, Russia within a span of two months from the date of award of contract by Indian Navy.

Further, the company has initiated the process of working with governments of six friendly nations to build warships for them at the company's facilities at Pipavav, besides working towards developing strategic maritime assets for one such friendly nation in accordance with guidelines/ policies of Government of India. The company is also aiming to augment suitable infrastructure to tap a significant opportunity to cater to the requirements of Indian army. The board at its meeting held on August 12, 2011 has transacted and noted the above business.