Billionaire investor Rakesh Jhunjhunwala is leading a Rs 81.9 crore investment in SKIL Infrastructure-owned Pipavav Defence & Offshore Engineering (formerly Pipavav Shipyard) through convertible warrants. Rakesh and Rekha Jhunjhunwala will pick up 5 million warrants each while Utpal Sheth, a partner at Rare Enterprises(the privately held firm of the ace investor) will also buy 5 lakh warrants worth Rs 3.9 crore.
These warrants, subscribed at Rs 78 each, are convertible in 18 months.
According to VCCircle estimates, Jhunjhunwala along with his wife will hold a 1.35 per cent stake in Pipavav after conversion of all the outstanding securities(including current issued shares and outstanding convertibles).
Promoter group unit Grevek Investments and Finance is also subscribing to 10 million warrants at Rs 78 per unit, amounting to an investment of another Rs 78 crore.
The share price of Pipavav closed at Rs 77.3 on the BSE on Tuesday, up by nearly 1 per cent.
"The proceeds from the issue of warrants would be used towards furthering opportunities in Defence segment and for General Corporate purposes," said Pipavav in a filing with the exchanges.
Pipavav Defence & Offshore Engineering, has raised PE funding from investors like New York Life
Investment Management India Fund and Trinity Capital. Last year it raised $40 million (Rs 177.80 crore) from PE firm Valiant by issuing compulsorily and mandatorily unsecured convertible debentures.
Pipavav Defence promoter firm, SKIL Infrastructure, filed its DRHP with market regulator Sebi for a Rs 1,125 crore initial public offering in June this year.
Pipavav Defence operates one of the largest shipyards in India and among the fifth largest in the world in terms of its size (400000 dwt). Pipavav is the only private shipyard in India to have license to produce
frontline warships and signed a contract with the Ministry of Defence for construction of 5 naval gunboats worth Rs 3000 crore earlier this year.