Pipavav Shipyard zooms as big operators seen eyeing stock

Shares of Pipavav Shipyard have gained over 14% in the past one week on rumours that a few well-heeled investors could pick up stake in the company. On Monday, volumes surged to three times of the two-week average, driving the stock 4% higher to 76.55.

Some traders, however, think the trading activity was a ploy by some operators to rig the stock. The board of directors of the company is meeting on Tuesday to consider the issuance of convertible share warrants and brokers are betting that the warrant price may be near the current market price.

When contacted, Pipavav chairman Nikhil Gandhi said, "I cannot say anything about the warrants at this moment." While financials of the company have marginally improved, most analysts are sceptical about its future prospects with promoters pledging their entire holding.

Besides, there is limited revenue visibility in the coming quarters. The company reported a net profit of 7.94 crore on a standalone basis in the June quarter against a loss of 9.79 crore in the year-ago period, but the loan interest outgo has nearly doubled to 43 crore during the same timeframe.

Contributed by Harish Rao & Reena Zachariah