Mazagon Dock shares surge nearly 6% as MoD moves ahead with submarine plan

Shares of Mazagon Dock Shipbuilders (MDL) today surged as high as 5.9% in today’s session to an intraday high of Rs 2,423.4 on the BSE after the Ministry of Defence (MoD) gave a go-ahead to the company to move for the next stage of bidding for a multi-billion dollar submarine project.

The defence ministry has moved ahead with a multi-billion dollar plan to construct next-generation conventional submarines in India, with MDL qualifying after technical trials and moving to the next stage of techno-commercial negotiations.

The bid by MDL in partnership with Germany's Thyssenkrupp Marine Systems (TKMS) has been given the go-ahead by a technical oversight committee that looked into the bidding process and trials carried out last year, according to earlier ET reports.


Meanwhile, the bid for this project made by Larsen & Toubro (L&T) was rejected by the defence ministry, deeming it to be non-compliant, according to a tweet posted by the news agency ANI.


Following this update, the L&T shares tumbled 1.6% to their day’s low of Rs 3,460.05 on the BSE.

As per the procurement process, the next stage will be to open the commercial bids that had been submitted by MDL. After going through the offer, detailed discussions on technical aspects and commercial terms will be carried out before the estimated Rs 43,000 crore proposal will be moved for approval to the competent authorities.

Additionally, the Navy had conveyed some shortcomings in the latter offering after a round of trials that pertained to the requirement of a sea proven air independent propulsion system.

Also read: Zensar Technologies shares zoom nearly 10% after Q3 results

Given the enormity of the project- six submarines have to be built in India with a high degree of technology transfer-the first of the new boats is expected to enter service almost seven years after signing of a contract. A key capability the new submarines will bring is the AIP system that will give the boats the ability to stay underwater for up to two weeks, greatly enhancing stealth.

Mazagon Dock share price analysis

Over the past year, the shares of Mazagon Dock have increased by 106.18%, while in the last six months, it has declined by 6.75%. For shorter durations, the price gained 12.52% in three months, 0.97% in one month, and 5.14% year-to-date (YTD).

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)