New Delhi, Aug. 1 -- In March 1985, Rishi Kamlesh Agarwal, then barely 30, incorporated Magdalla Shipyard Pvt. Ltd. in Surat with the aim of building ships in a country that had a 7,500-kilometre coastline, centuries of maritime tradition, and yet almost no shipbuilding industry to speak of.

A decade later, after a public listing and a name change to ABG Shipyard, the company appeared to be on course to achieving its audacious ambitions.

Its ambitions were well timed. Global demand for ships surged through the 2000s, and ABG rode the wave with operations in Surat and Dahej, a repair yard in Goa and, eventually, the capacity to build ships of up to 20,000 deadweight tonnes, among the largest any private Indian company had attempted.

ABG...