Pipavav Defence & Offshore Engineering stock hit as JV pact upsets rivals
Stock loses 4% despite bullish sentiment and rivals allege Mazagon Dock’s JV selection not transparent.
By ET Bureau | Updated:
MUMBAI: Shares of Pipavav Defence & Offshore Engineering saw heavy selling on Thursday, after rivals L&T and ABG Shipyard alleged "lack of transparency and arbitrary decision-making" in its naval joint venture with PSU Mazagon Dock.
The shares ended at 86.10 on the BSE, down 4% from the previous close, on a day when the Sensex closed up 1%. The shares lost 6% intra-day, with volumes higher than its two-week average. The rival shipyards have sent a letter to the defence ministry, declaring that the manner in which Mazagon Dock selected its JV partner was not transparent.
"No timeline was indicated for submission of detailed proposal, nor was any evaluation criterion discussed or made available," said the letter, a copy of which is with ET.
On Monday, the private shipbuilder announced its plans of entering a 50:50 JV with Mazagon Dock to build submarines and warships. Mazagon Dock, which had shortlisted four shipyards as potential partners, said the shipyards were given ample time to respond.
Reacting to the rivals crying foul, Pipavav chairman Nikhil Gandhi, said, "I believe that this has been a transparent process and Pipavav will not indulge in anything that is not fair."
The shares ended at 86.10 on the BSE, down 4% from the previous close, on a day when the Sensex closed up 1%. The shares lost 6% intra-day, with volumes higher than its two-week average. The rival shipyards have sent a letter to the defence ministry, declaring that the manner in which Mazagon Dock selected its JV partner was not transparent.
"No timeline was indicated for submission of detailed proposal, nor was any evaluation criterion discussed or made available," said the letter, a copy of which is with ET.
On Monday, the private shipbuilder announced its plans of entering a 50:50 JV with Mazagon Dock to build submarines and warships. Mazagon Dock, which had shortlisted four shipyards as potential partners, said the shipyards were given ample time to respond.
Reacting to the rivals crying foul, Pipavav chairman Nikhil Gandhi, said, "I believe that this has been a transparent process and Pipavav will not indulge in anything that is not fair."
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