Defence stocks jumped up to 7% on Tuesday after the Ministry of Defence signed contracts worth Rs 53,866 crore. The deal with GRSE and Goa Shipyard Limited covers eight next-generation corvettes for the Indian Navy. Many shares gained as investors reacted to this major boost for indigenous warship construction capabilities.
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Major defence stocks rallied on Tuesday after the Ministry of Defence signed contracts worth Rs 53,866 crore with Garden Reach Shipbuilders and Engineers (GRSE) and Goa Shipyard Limited (GSL) for the procurement of eight next-generation corvettes for the Indian Navy.
GRSE, which will build five of the eight warships, was among the top gainers in the defence pack. The stock was trading at Rs 2,191.40 on the NSE, up Rs 144.60 or 7.06%. It touched an intraday high of Rs 2,235.
Mazagon Dock Shipbuilders was trading at Rs 1,819, up Rs 87.40 or 5.05%, while Hindustan Aeronautics Limited (HAL) gained 2.18% to Rs 4,961. Bharat Electronics (BEL) was up 1.46% at Rs 382.
Solar Industries India advanced 3.14% to Rs 20,048, while Cochin Shipyard gained 3.83% to Rs 1,211.70. Data Patterns was up 2.70% at Rs 3,943.70, while Bharat Dynamics rose 3.25% to Rs 1,028.35. Bharat Forge gained 1.06% to Rs 1,771.90, and Paras Defence and Space Technologies was up 0.76% at Rs 1,223.40.
The Nifty India Defence index was trading at 8,997.60, up 170.95 points or 1.94%.
Shares of Apollo Micro Systems edged up 0.25% to Rs 398.80. However, Zen Technologies slipped 0.27% to Rs 1,716, while MTAR Technologies declined 3.28% to Rs 6,295.
The defence ministry on Monday said it had signed contracts worth Rs 53,866 crore with GRSE and GSL for the procurement of eight next-generation corvettes for the Indian Navy. The warships are aimed at bolstering the Navy's combat capabilities, particularly in the Indian Ocean, amid China's increasing forays into the region.
The contracts were signed with GRSE and GSL for the acquisition of corvettes equipped with advanced missiles, weapons and sensor suites. These capabilities will enable the ships to undertake complex missions across different operational domains.
Under the contracts, GRSE will construct five corvettes, while GSL will build the remaining three, the ministry said.
"The project marks a significant milestone in India's indigenous warship design and construction capabilities, as it is the first project in which the ships will be indigenously designed by the Indian Navy and constructed by defence public sector undertakings," the ministry said.
The corvettes will have advanced missiles, weapons and sensor suites, enabling them to undertake missions across the air, surface and sub-surface domains.
Defence Minister Rajnath Singh said the project would provide a significant impetus to India's shipbuilding sector by strengthening collaboration among defence PSUs, private shipyards and Indian industrial partners.
The construction of the ships is expected to generate approximately 72 lakh person-days of employment in the shipyards and 460 lakh person-days in ancillary industries and micro, small and medium enterprises (MSMEs) over the next 10 years, Singh said.
The ministry said the induction of the warships would enhance the Indian Navy's capabilities in safeguarding maritime trade routes, conducting anti-surface and anti-submarine warfare operations, strengthening coastal defence, undertaking littoral combat operations and carrying out maritime surveillance missions.