The Company, then a wholly owned subsidiary of SKIL, was incorporated as Pipavav Ship Dismantling and Engineering Limited on October 17, 1997 under the Companies Act.

In April 2005, IL&FS, one of the leading infrastructure finance companies in India, became a shareholder, and the name of the Company was changed to Pipavav Shipyard Limited. Government of India controlled banking institutions EXIM Bank and IDBI also took stakes in PSL as well as mutual fund UTI.

In 2007, several other major financial players became shareholders in the form of foreign equity investors.