Cochin IPO hits fees stumbling block

Indian state shipbuilder could call new round of bids from banks to advise on share sale.

Progress on Indian state shipbuilder Cochin Shipyard’s IPO has been delayed as it failed to agree advisory fees with banks.

The Global Capital website, citing banking sources, said the government may have to call a second round of bids.

Nine banks offered in for the business: Axis Capital, Edelweiss Financial Services, IDBI, IDFC, ICICI Securities, IL&FS Capital Advisors, JM Financial, SBI Capital Markets and Yes Bank.

The part-privatisation could be worth up to INR 7bn ($106m).

The cash will go towards a new shiprepair dock for VLCCs and other big vessels.

Cochin’s revenue has increased fivefold from INR 3.73bn in 2005/06 to INR 18.59bn in 2014/15.

Net profit has more than doubled from INR 940m to INR 2.35bn over the same period.

The yard is building four ferries at an estimated cost of INR 14bn for the Andaman and Nicobar islands.