Mazagon Dock shares surged by 4 per cent following advanced talks on acquiring additional Kalvari-class (Scorpene) submarines for the Navy, potentially sealing a Rs 35,000-crore deal that promises to bolster India's submarine fleet.
The three new submarines under negotiation will be larger and equipped with state-of-the-art electronics, enhancing their strength and endurance compared to their predecessors, reported ET citing sources.
Being a government-owned PSU and working under the Ministry of Defence, Mazagon Dock Shipbuilders Limited is the designated shipyard for building naval vessels and submarines for the Indian Navy.
It makes everything from cargo vessels to offshore platforms and destroyers, frigates, corvettes and submarines.
Mazagon Dock is the country’s largest shipbuilder, both in terms of revenue and order book and is tasked with manufacturing some of the Indian Navy’s most ambitious programmes, including its Scorpene class of submarines and the Visakhapatnam and Kolkata class destroyers.
As of March 2024, the company has an order book of around Rs 39,000 crore that includes backlogs for the P-15 Bravo destroyers, P-17 Alpha frigates and P-75 submarines.
The company has been awaiting approval from the Indian government for the submarine project worth Rs 35,000 crore for manufacturing three more submarines, the first of which was inducted in 2017. These submarines, commonly referred to as the Scorpene class submarines, were developed by the French government-owned Naval Group of France.
In 2005, India inked a deal with France under which the French defence manufacturer agreed to a full technology transfer to Mazagon Dock.
At 10:07 am, Mazagon Dock Shipbuilders shares were trading 3.8 per cent higher at Rs 4,045.35 apiece on the National Stock Exchange (NSE). The stock has enthralled investors since it made its debut on exchanges in 2020.
In the last year alone, shares of Mazagon Dock Shipbuilders have rallied by as much as 220 per cent, more than tripling investors' money.
The confidence in defence stocks remains high with rising capex and the government's ‘Make in India’ initiative, along with rising export orders. This along with a strong order book has boosted Mazagon Dock Shipbuilders' share price.
Year-to-date (YTD), the PSU stock has jumped over 75 per cent, beating benchmark Nifty's 8 per cent returns.
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