Pipavav Shipyard Limited –IPO -Avoid

Downtrend in the shipbuilding industry to continue in near future. Renegotiation / Cancellation of orders to impact top‐line and margins. Dependence on a few major customers. PSL has recently started its operations and have very limited operating history. So far company has obtained orders from only four customers namely: Golden Ocean, AVGI Maritime, Setaf SAS and ONGC and is highly dependent on them.

Lack of experience
Considering the downturn in shipbuilding industry, lack of experience of PSL in shipbuilding, low order book as compared to the size of shipyard and higher valuation as compared to its peers you should AVOID this IPO.

Thanks to Angel Broking for the analysis.

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