Reliance Infrastructure's open offer in Pipavav Defence awaits approval from Gujarat Maritime Board

MUMBAI: Reliance Infrastructure's proposed open offer in Pipavav Defence is facing a delay with the Gujarat Maritime Board yet to give its approval. The Anil Ambani-group company's acquisition of Pipavav Defence, a private shipyard based in Gujarat for Rs 2,000 crore, was approved by the capital market regulator Sebi on April 29, 2015.

In the first week of May, anti-trust watchdog Competition Commission of India (CCI) also approved the acquisition.

Reliance Infrastructure is required to make an open offer to buy up to 26 per cent stake of Pipavav's public shareholders.

An email query sent to Gujarat Maritime uery sent to Gujarat Maritime Board did not elicit any response till the time of going to press.

An official of Gujarat Maritime Board on condition of anonymity said that the board has considered the proposal and sent their recommendation to Gujarat Government in April.

In response to an email query, a Reliance Infrastructure spokesperson said, "Sebi by its letter dated May 11, 2015 had advised that open offer may commence upon receipt of final approval from the Gujarat Maritime Board. As informed by the AcquirerPAC, the approval from the Gujarat Maritime Board is currently awaited.Upon receipt of the approval, necessary steps will be taken in this regard."

Market participants are surprised that the delay in completing the acquisition is because of the Gujarat government. Reliance's acquisition of Pipavav is the first major deal in the domestic defence business after the government's push for the industry .

"It is very strange that the first mover (deal) in Narendra Modi's dream project 'Make in India' is surprisingly held up by a board," said a CEO of leading brokerage.