India’s Pipavav Defence & Offshore Engineering Co Ltd on Thursday denied it was in talks to sell a stake to Mahindra & Mahindra Ltd, after a media report said it was close to clinching a deal.
The Economic Times, citing unnamed sources, said techonology-to-automative conglomerate Mahindra would purchase a stake in Pipavav for about 30 billion rupees ($481.15 million), in a phased transaction that would eventually see it own a majority share.
“There are no negotiations/agreements which the company has entered into which requires disclosure under clause 36 of the listing agreement,” Pipavav said in a regulatory statement.
Earlier this month, the Economic Times reported that Indian motorcycle maker Hero Group, as well as French shipbuilder DCNS, had begun talks to buy a controlling stake in Pipavav, which operates facilities for shipbuilding, repairs and engineering.
Companies are rushing to expand into India’s defence sector, which is expected to grow rapidly as the government spends billions to modernise its armed forces, in part by developing a domestic industry that replaces the need for imported equipment.
Shares in Pipavav were trading down 0.6 percent at 0855 GMT on Thursday. The stock has jumped more than 26 percent since the start of the week. ($1 = 62.3500 Indian rupees)