Expect to get clearance from defence ministry soon: Pipavav

Shares of Pipavav Defence sank over 3.5% in morning trade on Tuesday, after its joint venture with Mazagon Dockyard was put on hold by the Defence Ministry.

The controversy over Mazagon Dock’s choice of Pipavav Shipyard as its naval joint venture partner snowballed into a big controversy, after ABG Shipyard and Larsen and Toubro (L&T), another bidder Bharati Shipyard, raised questions over the selection process.

The ministry said it will study the complaints from the private shipyards regarding the JV. It has reiterated that the JV must compete for contracts and not get them on nomination basis.

Confirming the news on CNBC-TV18, Nikhil Gandhi, chairman of Pipavav Defence said that he expects to get clearance from the ministry in the next two-three weeks.

On being asked what is the course of action at Pipavav, given that the deal has been put on hold, Nikhil Gandhi said that he considered it good news because this joint venture will last for the entire life and it must go through all the scrutiny possible. “Our strength should be vindicated if it has gone through a very transparent and elaborate process over almost eight months” he said.

He said that they are confident that it will pass the muster, even if it takes a couple of weeks more.

Nikhil Gandhi said that the government had opened this joint venture opportunity from three different shipyards, including companies or competitors like L&T or ABG and there is room for all the players.

He further added, " Pipavav Defence is matchless. The global partnerships can be formed only if they believe in the company’s infrastructure and capabilities."

Watch Video: Shares of Pipavav Defence sank over 3.5% in morning trade on Tuesday, after its joint venture with Mazagon Dockyard was put on hold by the Defence Ministry.