Welspun Corp Ltd has approved a joint venture arrangement with Perma-Pipe Qatar to establish internal fusion-bonded epoxy (IFBE) coating capabilities in India, strengthening its integrated pipeline solutions business.
Under the proposed arrangement, Welspun Corp will acquire a 49% equity stake in Welspun Special Coating Pvt Ltd (WSCPL) from its wholly owned subsidiary, Welspun DI Pipes Ltd (WDI), for ₹49,000. Perma-Pipe Qatar will acquire the remaining 51% stake from WDI for ₹51,000.
Joint venture to invest up to ₹110 crore
WSCPL was recently incorporated with an initial paid-up share capital of ₹1 lakh to undertake IFBE coating works and related activities in India.
The total investment in the venture is estimated at up to approximately ₹110 crore, to be funded by the partners in proportion to their shareholding. Welspun Corp will also enter into a shareholders’ agreement with Perma-Pipe Qatar to govern the joint venture.
Following completion of the transactions, WSCPL will cease to be a wholly owned subsidiary of WDI and become a direct associate company of Welspun Corp, with the two partners holding 49% and 51%, respectively.
Coating technology protects steel pipes
Internal fusion-bonded epoxy coating involves applying epoxy-based powder to the inner surface of steel pipes to protect them against corrosion and chemical damage.
The technology is used in onshore and offshore oil and gas pipelines, slurry pipelines, chemical processing plants, food processing applications, and underground or underwater water pipelines.
Focus on domestic and export orders
The proposed joint venture is expected to strengthen Welspun Corp’s ability to bid for domestic and export orders for IFBE-coated pipes by adding specialised coating capabilities to its existing manufacturing operations.
WDI’s board has approved the transfer of its entire equity stake in WSCPL to Welspun Corp and Perma-Pipe Qatar in the agreed proportions, along with execution of the share purchase agreement.
The arrangement will expand Welspun Corp’s integrated pipeline offering while combining its manufacturing capabilities with Perma-Pipe Qatar’s coating expertise.