The share price of one of India’s leading warship builders gained around 4.5 percent to an intraday high of ₹4,070 per share following the company’s discussion to acquire additional Kalvari-class submarines for the Navy with an expected deal of ₹35,000-crore.
At 12:35 p.m., Mazagon Dock Shipbuilder Ltd(MDSL) shares were trading at ₹3,993 per share, up 2.52 percent from the previous close price on the exchange. The company has a market capitalization of ₹80,519 crore.
What Happened: Mazagon Dock Shipbuilders Ltd is negotiating with the Ministry of Defence for a potential ₹35,000 crore deal to acquire additional Kalvari-class (Scorpene) submarines for the Indian Navy.
According to the report, Mazagon has submitted a detailed techno-commercial bid for the contract to the Ministry. The proposed submarines would feature at least 60 percent indigenous content, significantly benefiting Indian submarine suppliers and the MSME sector.
Why the deal matters: ET reported that three new Kalvari-class submarines, currently under negotiation, will be larger than their predecessors and equipped with modern electronics, enhancing their strength and endurance.
This acquisition will enable Mazagon to gain significant technology transfer, allowing future submarines of this class to be fully designed, developed, and manufactured indigenously in India.
The deal will boost the company’s underwater naval capabilities and strengthen the indigenous shipbuilding industry under the ‘Atmanirbhar Bharat’ (self-reliant India) initiative.
About Company: 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 programs, including its Scorpene class of submarines and the Visakhapatnam and Kolkata class destroyers.
Mazagon is currently constructing the Kalvari class of submarines under Project 75 with the help of France. The sixth and final one is expected to be delivered by the end of the year. The additional submarines, it proposed, could be delivered within 6 years.
Mazagon Dock Shipbuilders Limited is a leading shipyard in India. It primarily manufactures for the defence sector and has built 801 vessels including 27 warships ranging from advanced destroyers to missile boats and 7 submarines.
Mazagon Dock, India’s only shipyard manufacturing destroyers and conventional submarines for the Indian Navy, also produces cargo and passenger ships, supply vessels, water tankers, tugs, dredgers, fishing trawlers, and barges for various customers across India.
Company order book: As of March 2024, the company has a substantial order book amounting to approximately ₹39,000 crore, which includes backlogs for the P-15 Bravo destroyers, P-17 Alpha frigates, and P-75 submarines.
Recent order: In the first week of May 2024, Mazagon Dock Shipbuilders Limited signed individual shipbuilding contracts with a European client for the design, construction, and delivery of three 7,500 DWT multi-purpose hybrid-powered vessels, valued at USD 42 million (approximately ₹. 350 crores).
Financials:In the fiscal year 2023-24, the company achieved a consolidated net profit of ₹1,936 crores, marking a substantial 73% increase from the previous fiscal year. Additionally, total revenue for the year grew by 21%, reaching ₹9,466 crores.
Stock Returns: Mazagon Dock’s shares have delivered a remarkable return of 217% over the past year, meaning a shareholder investment of ₹.1 lakh would now be worth ₹. 3.17 lakhs.
Written by Omkar Chitnis
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