Will grow order book significantly going forward: Nikhil Gandhi, Pipavav DOC 

[Editor: Pipavav Defence and Offshore Engineering Ltd (CMP: Rs.43.65) was recommended today during the market hours at Rs.44, for a price target of Rs.51-52. According to Business Today, July 27, 2008: One day in the early 1990s, Nikhil Prataprai Gandhi was almost beaten to death by a mob protesting against the development of a port at Pipavav in Gujarat. The port was conceptualised in 1990 by SKIL Infrastructure, a company Gandhi founded with younger brother Bhavesh. Gandhi was badly wounded in that attack. After he came out of hospital, he visited Shirdi in Maharashtra to offer prayers at Saibaba’s shrine. In Shirdi, he befriended a Saibaba follower who, in 1992, introduced Gandhi to the late Dhirubhai Ambani, founder of the Reliance group. That meeting changed his life. “If Dhirubhai uncle had not helped me, I would have been dead,” says Gandhi. Ambani taught Gandhi the virtues of identifying growth-oriented ventures ahead of their time, and executing them on time. The Reliance patriarch would joke that Gandhi was a member of the “zero club”, which meant that he had only one way to go—up.
That’s exactly the direction in which the 48-year-old (now 54 years), self-styled “infrapreneur”—an entrepreneur with a focus on infrastructure—has been headed over the past two decades. Gandhi is stingy with the numbers, preferring to point to a study of the SKIL group’s investments by Ernst & Young, which values them at a little over $10 billion as of December 2007. A section of the market dismisses him as a front for Mukesh Ambani (son of Dhirubhai), but Gandhi is quick to retort: “I am a self-made man.”]
ET Now: How have things changed on the ground with regards to decision-making and order inflows for you as a company? 

Nikhil Gandhi: After taking over, the new government had sent a very strong signal that it believes in action. It made clear that it wants to fire up manufacturing in India, which is extremely critical. India will have to be self-sufficient in defence, for which the local production houses need to be encouraged and supported. This requires technology, which in turn needs FDI. Our long pending demand has been the opening up of FDI in defence and I am glad that the new government has been sensitive and sincere about making India self-sufficient insofar the defence sector is concerned. I believe, no country in the world can become developed unless its national security is firmly in place. 

ET Now: Where does your order book stand right now? 

Nikhil Gandhi: We have been a heavy net importer, both in naval defence and offshore. So the opportunity is humungous. We only required some encouragement by the government and we have been seeing that in the last few months. The critical factor is to build a world class infrastructure, which should be globally competitive. Therefore, the recipe for success is - the Indian entrepreneur will have to be sensitive and sincere in building the infrastructure and the assets on time without any cost overrun. 

ET Now: What is the growth opportunity you see across ship building, offshore as well as defence segments over the next couple of years? 

Nikhil Gandhi: The growth opportunity is large. For example, today the requirement in the oil & gas and defence sectors runs into hundreds of billions of dollars over the next five-six years. But we need to have the infrastructure to cope up with these demand. With the new policy in place by the Government of India, there will be many Indian entrepreneurs who would be setting up these facilities to take advantage of these multibillion dollar opportunities, knocking right on their doors.

ET Now: You have a JV with Mazagon Dock which provides you exposure towards a 20-billion order book. With the government ramping up indigenous capacities, what can we expect from this JV? 

Nikhil Gandhi: The joint venture is an interesting part, because the facilities at Mazagon Dock are probably smaller compared to their order book. Wherever they think important and necessary, they will partner with a company like Pipavav and make sure that the contracts are executed on a fast track basis. However, Pipavav on its own has a good order book and is bidding for some large contracts - both in defence and oil and gas sector assets. We think we will be self-sufficient in bidding for those contracts 

Courtesy: The Economic Times