France's DCNS to acquire 15% stake in Pipavav Defence for Rs 1,350 crore

[SpArK]

France's DCNS to acquire 15% stake in Pipavav Defence for Rs 1,350 crore​

MUMBAI: French warship maker DCNS will buy close to 15% stake in Nikhil Gandhi-promoted shipbuilder Pipavav Defence & Offshore Engineering for about Rs 1,350 crore, according to people close to the development.

"DCNS will invest a little more than Rs 1,350 crore to acquire a significant minority stake in Pipavav Defence," one of the persons said. "They had earlier signed a strategic alliance with Pipavav, but have now decided to be a strategic investor. The stake sale will be completed over the next few days." A formal announcement is likely soon.

DCNS, owned by the French government, specialises in building surface combatants, submarines, systems and equipment. The company reported revenues of $3.3 billion last year.

"DCNS recently received in-principle nod from the French government to invest in Pipavav. The deal will be closed by next week," another person involved in the deal said. Pipavav's top executives were not available for comment.


The deal would value the shares of Pipavav at a premium of 30% to their Friday closing price of Rs 92.95 on the Bombay Stock Exchange, where it ended down 3.28%. The French company's interest in Pipavav is a sign of the growing interest among foreign players to invest in India's defence sector. Japanese conglomerate Mitsubishi has expressed interest in acquiring stake in LarsenBSE 0.78 % and Toubro's shipbuilding subsidiary.

In May, Pipavav had sought shareholders' approval to raise up to $200 million (about Rs 1,100 crore) to finance its growth plans for the defence sector.

Earlier this month, the company had formed a joint venture with Mazagon Dock, the country's biggest naval shipyard. Interestingly, Mazagon Dock had said in February that it was manufacturing six SSK Scorpene submarines (P75) under transfer of technology from DCNS.

According to people in the know, DCNS plans to increase its stake in the Indian firm to 26% by next year and bring in three of its executives on the company board once necessary approvals are in place.

Last month, Pipavav had announced a deal with Saab, under which the Sweden-based defence and security company would invest Rs 201 crore for a 3.5% stake.


Public-private partnership in the defence sector was opened last year, and Mazagon Dock was the first off the block. Three others - Cochin Shipyard, Hindustan Shipyard and Garden Reach Shipbuilders - are expected to follow suit.

Pipavav's deal with Mazagon Dock, notified by the defence ministry recently, will help Pipavav execute at least some of Mazagon's order book, which runs into at least Rs 1 lakh crore. Following the notification, insurance company LIC recently increased its stake in Pipavav to 8.74%.

Indian shipyards contribute only 0.1% to the global shipbuilding industry. In contrast, shipyards in China, Japan and South Korea produce more than 75% of the vessels manufactured globally, forcing Indian shipyards to look for orders from the domestic defence sector.

India has about 150 warships in service with its navy and another 75 warships in Coast Guard.

France's DCNS to acquire 15% stake in Pipavav Defence for Rs 1,350 crore - The Economic Times

 

[selvan33]

good move. we need more private firms in defence sector to produce an advanced weapons in a sppedy way. but i dont know that our goverment workers(and also that useless associations) will accept these things or they will go for hunger stike to prevent public private partnership.

 

[Yeti]

This could result in some of the project 75 I subs being built at Pipavav shipyard if they win the deal.

 

[Koovie]

This could result in some of the project 75 I subs being built at Pipavav shipyard if they win the deal.

I thought exactly the same, seems that the French feel pretty comfortable about the outcome of the P75I tender

 

[Yeti]

I thought exactly the same, seems that the French feel pretty comfortable about the outcome of the P75I tender

I still like the idea of developing the U-216 submarine as per our requirments. I feel we should go ahead with the tender like we did for the MRCA and see who offers what but I have a feeling like you that the French might also win this deal with a enlarged version of the Scorpene class together with AIP, also they can offer nuclear technology which could be used for our nuclear sub program.

 

[arp2041]

This could result in some of the project 75 I subs being built at Pipavav shipyard if they win the deal.

For a change, P-75I MAYBE opened to the private shipyard:

India May Open Sub Deal to Private Yards | Defense News | defensenews.com

I thought exactly the same, seems that the French feel pretty comfortable about the outcome of the P75I tender

I still like the idea of developing the U-216 submarine as per our requirments. I feel we should go ahead with the tender like we did for the MRCA and see who offers what but I have a feeling like you that the French might also win this deal with a enlarged version of the Scorpene class together with AIP, also they can offer nuclear technology which could be used for our nuclear sub program.

We have to read b/w the lines, MDL will be the premier shipyard for P-75I, it already have TOT of scorpenes as DCNS is giving it's full support, MDL has recently made a JV with the Pipavav Shipyard for future IN orders, Pipavav is giving 15% stake to the DCNS & DCNS want to raise it to 26% in a year or so, these things are speaking volumes for P-75I.

 

[karan21]

Good news. Indian shipyards need to work with the best in the world to gain expertise.

 

[Abingdonboy]

This is excellant news. DCNS will be able to provide some of their world-class tech and expertise to the Indian mareket and this is yet another large shipyard project for India which are the need of the hour right now as the IN is set to go all out on a buying spree with 49 addtional vessles already cleared by the MoD on top of the 46 already under construction for the IN. The shipyards are currently full so increase in productive capacity is a must. Not to mention that if/when the IN is seriously interested in buying a DCNS product the fact it can be built in India is going to be a serios sweetner.

 

[sancho]

This could result in some of the project 75 I subs being built at Pipavav shipyard if they win the deal.

State-Run Mazagon Dock Confirms JV with Pipavav Defence to Build Warships and Submarines

Posted on: May 04, 2012

India’s largest private defence shipyard Pipavav Defence and Offshore Engineering has been chosen by state-run Mazagon Dock as a joint venture partner to build warships and submarines for Indian Navy. While the joint venture was stalled earlier due to a row over the Mazagon Dock’s selection policy, the joint venture now stands confirmed by the government...

...The latest joint venture would afford better utilisation of Pipavav's shipyard which is considered as one of the most modern in India. Mazagon Dock will now use Pipavav's facility in Gujarat to build orders that it has on hand...

State-Run Mazagon Dock Confirms JV with Pipavav Defence to Build Warships and Submarines - Defence Now


The JV itself was a good move, but DCNS joining Pipavav is a huge point! The selection of additional Scorpenes, Mistral class LHDs, possbily even the new Brave class support ships will get a huge boost now. Moreover India could benefit a lot from French excellent naval design capabilities.

I still like the idea of developing the U-216 submarine as per our requirments.

Since most likely U214 was offered in P75I, a joined development of U216 would still be possible, even if the French bags this competition. I am only afraid about the "indigenous" complex of us!

 

[Abingdonboy]

State-Run Mazagon Dock Confirms JV with Pipavav Defence to Build Warships and Submarines - Defence Now


The JV itself was a good move, but DCNS joining Pipavav is a huge point! The selection of additional Scorpenes, Mistral class LHDs, possbily even the new Brave class support ships will get a huge boost now. Moreover India could benefit a lot from French excellent naval design capabilities.




Since most likely U214 was offered in P75I, a joined development of U216 would still be possible, even if the French bags this competition. I am only afraid about the "indigenous" complex of us!

@sancho I agree with all. Do you so agree that DCNS will/can help the IN a lot in design and development of its own future indigenously designed warships? Ie if we refer to the vid showing the IN's designs/dreams of the future ie catermarans LCS-like vessels, DCNS at the very least can provide a lot of consultant input not to mention systems and sub systems.


Also project management has got to be a major thing DCNS can bring to the Indian naval ship construction industry. If Pipav wih DCNS' help are able to deliver much faster than competitors the other players in the infustery will have to up their game. The IN is now emphasising haste on deliveries afterall.


+ @sancho could you give a quick run down of all the ongoing Indian naval shipyards undergoing deep up gradation and expansion and all the major shipyards being set up? I had sometime ago made a lost of such developments but I have since lost the list and now I have forgotten most of the projects.

 

[Agent_47]

@sancho Can you explain more about 'Brave class '?

 

[sancho]

Do you so agree that DCNS will/can help the IN a lot in design and development of its own future indigenously designed warships?

IN doesn't design warships, Indian shipyards will and Pipavav will surely use DCNS as a partner in future, be it for design or certain techs.

could you give a quick run down of all the ongoing Indian naval shipyards undergoing deep up gradation and expansion and all the major shipyards being set up? I had sometime ago made a lost of such developments but I have since lost the list and now I have forgotten most of the projects.

Sorry buddy, I am not following all the IN projects and am not up to date about the ship yards either.

@sancho Can you explain more about 'Brave class '?

The Brave class is a multi role support ship and replenishment tanker that DCNS is currently developing. It is aimed to support naval vessels in long range missions, by refuelling them or providing food, water, spares and weapons. It can also be used in humanitarian roles, to provide vehicles and goods after an disaster, or for evacuations roles, in which it can accomodate up to 100 additional passengers.
If it had a well deck to carry amphibious vehicles, it could have been fielded into INs competition for LDPs/support ships as well.

Brave® | DCNS

BRAVE class replenishment and support ship AOR fleet oiler AOE Fast Combat Support Ship Batiment RAvitailleur d

 

[Abingdonboy]

@sancho the IN indeed does have its own naval design department - the Directorate of Naval Design (DND) these are the guys who designed the P-17,IAC-1 and P-15A for eg.

 

[arp2041]

IN doesn't design warships, Indian shipyards will and Pipavav will surely use DCNS as a partner in future, be it for design or certain techs.Sorry buddy, I am not following all the IN projects and am not up to date about the ship yards either.

Sancho did u made a mistake??? IN has it's own design bureau, infact i posted an article few days back on there Stealth Gp. responsible for designing stealth warships:

https://sites.google.com/site/idpse...dian-navy-s-design-organization/stealth-group

 

[SpArK]

1 such called National Institute of Warship/Submarine design & indigenization centre by Mazagon Dock Limited (MDL) at Beypore, Kozhikode, kerala will up soon.