Tata plans historic splash into shipbuilding with ₹10,000 crore Kerala shipyard deal

Thiruvananthapuram: The Tata Group has expressed its willingness to invest approximately ₹10,000 crore in the shipbuilding sector in Kerala. Chief Minister V D Satheesan clarified that the government is considering this favourably and intends to grant approval within a month. The government will provide the necessary land for the project. This is a crucial investment for the development of Kerala's maritime sector. The proposal submitted by the Tata Group is to establish a shipyard. It was not specified where the project will be located. The Tata Group has not released an official response on the matter. The government has requested a project report from Tata.

Tata's willingness is evaluated as an indication that maritime industrial investments will flow into Kerala with the Vizhinjam International Seaport becoming operational. The government's objective is to develop a comprehensive maritime industrial chain encompassing shipbuilding, repairs, marine engineering, logistics and allied industries. The Chief Minister also informed that Singapore's Changi Airport company has expressed interest in investing in Kerala.
Tata's first venture into shipbuilding

This is the first time the Tata Group is entering the field of shipbuilding. However, Tata NYK Shipping Pte. Ltd., formed in 2007 with equal partnership between Tata Steel Limited and the Japanese shipping company NYK Line, operates in maritime freight transport. Companies like the Tata Group companies, ArcelorMittal, JSW, Vedanta and Adani Enterprises utilise the services of this company.

Existing enterprise: Cochin Shipyard

Cochin Shipyard, a Central Public Sector Undertaking established in 1972, is one of the largest shipbuilding facilities in India. Its Initial Public Offering (IPO) took place in August 2017. Recently, the Central Government sold an additional 5.04% stake through an Offer for Sale (OFS).

Currently, the Centre holds a 62.87% equity stake. It has built many massive vessels, including INS Vikrant, India's first indigenous aircraft carrier. Apart from serving the defence forces, it undertakes the construction of modern commercial vessels and extensive ship repair works.

A boon for Kerala

If the Tata Group's investment in Kerala's shipbuilding sector materialises, it will be a major asset for the state, says Madhu S Nair, former CMD, Cochin Shipyard.