According to market sources, Jhunjhunwala will acquire a significant minority stake in Pipavav.
On Tuesday, Pipavav Shipyard shares rose 4.7 per cent, or Rs 3.50, to Rs 76.90 on the Bombay Stock Exchange in an overall weak market.
Pipavav Shipyard Ltd has informed the BSE that a meeting of the board of directors will be held on September 6 to consider the issue of convertible share warrants, pursuant to the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.
Jhunjhunwala could not be reached for a comment. A text message and an e-mail query sent to Gandhi remained unanswered.
During August 2010, Pipavav board had approved to issue 25.2 million convertible warrants to the promoters of the company, leading to an investment of around Rs 250 crore (Rs 2.5 billion) in the company.
At present, the promoter group including SKIL Infrastructure Ltd and SKIL Shipyard Holdings Pvt Ltd holds 45 per cent stake in Pipavav.
Among public investors, Ovira Logistics holds about 7.67 per cent while Foreign Investors Institutions such as Smallcap World Fund Inc (6.05) and New York Life Investment (2.8) hold stake in Pipavav.
Public holding in Pipavav stands at 36.23 per cent.
Pipavav Shipyard was in the news following the Indian Navy's order to the company to design and construct five naval offshore petrol vessels, amounting to Rs 2,975 crore (Rs 29.75 billion).
It had tied up with foreign partners such as US-based Northrop Grumann and UK-based Babcock Group to strengthen its presence in defence segment.
The company is also in talks with six governments of various nations to build warships at company's facilities.
In the last quarter, company signed a major protocol with a company controlled by Russian ministry of defence for a potential contract of $2 billion.
It also proposes to own controlling stake in Bengaluru-based Conceptia Software, a ship design, engineering and consulting firm.
Image: Rakesh Jhunjhunwala | Photograph: Reuben NV
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