Pipavav Shipyard incorporated in 1997, was originally promoted by SKIL Infrastructure and Grewek Investments which has shareholding interests  of 21.01% and 2.13% respectively in the company. Punj Lloyd which acquired a 25% stake, is now a co-promoter. The company was earlier planned and developed as a ship-dismantling facility in order to meet the anticipated demand arising from International Maritime Organization (IMO) regulations that were expected to be implemented in 2002 and which would have resulted in an increased rate of retirement of older tankers by ship owners. But due to the deferment of the implementation of IMO regulations, the company decided to convert the ship-dismantling facility, (then under construction) into a shipyard at a cost of Rs 2,888. 82 crores to meet the expected increase in demand for new vessels.

Most of the existing infrastructure from the ship-dismantling facility, including two wet basins, is being incorporated in the construction of the Pipavav Shipyard which includes conversion of one existing wet basin into a 651 meters long and 65 meters wide drydock, capable of accommodating ships of upto 400,000 DWT and /or multiple combination of smaller vessels; construction of a fabrication and block assembly facility for shipyard operations; establishment of dry land facilities, comprising a fabrication area for the company's offshore business products and the installation of a ship lift facility, including multiple berths, for building and repairing small to medium sized ships, including naval vessels. The company is planning to bid for ONGC's offshore fabrication projects. Tenders are expected to be floated in the next 3-4 months. In addition to commercial ships, Piapavav Shipyard  is actively eyeing oil and gas offshore fabrication and development projects. The company therefore plans to bid for offshore projects being floated by Reliance Industries and other companies. The Shipping Corporation of India had recently floated a tender for four Panamax vessels and Pipavav Shipyard was the only applicant so far. The company will also undertake construction of offshore platforms, rigs, jackets.

The company has bagged India's largest shipbuilding order of USD 1.06 billion for 26 Panamax  bulk carriers. The company has entered into agreement with 3 international ship-owners for the construction of these bulk carriers. The company will be delivering its first Panamax vessel to a Greek firm by March 2009. The vessel has been ordered by Bermuda-based Golden Ocean which has ordered a total of 6 vessels from Pipavav. AVGI Maritime, another Greek company, has placed orders for 16 Panamax vessels and Setaf of France has ordered four. The vessels of aggregate DWT of approx 1,937,000 will be delivered between 2009 and 2012.

Out of the proceeds of the issue, the company intends to use Rs 2,371.29 crore for construction of facilities for shipbuilding, ship repairs and offshore business; Rs 457.53 crore for working capital and Rs 60 crore for general corporate purposes.

The company is yet to commence commercial operations though has received initial payment from ship owners aggregating to Rs 609.16 crores. These contracts are collectively worth approximately Rs 4,299.26 crores.