Mazagon Dock shares surged by 4 percent following advanced talks on acquiring additional Kalvari-class (Scorpene) submarines for the Navy, potentially sealing a ₹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.

MDL is already constructing the Kalvari class of submarines under Project 75, with the sixth and final submarine expected to be delivered by the end of this year. If the deal goes through, the additional submarines can be delivered within six years.

The acquisition of these submarines will not only boost India's underwater strength but also provide significant technology transfer to MDL and its suppliers, paving the way for future submarines of the same class to be fully designed, developed, and manufactured indigenously.

As of March 2024, the company has an order book of around ₹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 ₹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.

The confidence in defence business remains high with rising capex and the government's ‘Make in India’ initiative, along with rising export orders. This acquisition will not only enhance India's underwater strength but also provide significant technology transfer to MDL and its suppliers.

(With Agency Inputs)