Defence stocks soar up to 7% after govt okays building 2 nuclear submarines

The Indian Navy will get two nuclear-powered attack submarines, which will boost its underwater deterrence capabilities manifold in the Indian Ocean Region

Shares of Mazagon Dock Shipbuilder, Cochin Shipyard, Hindustan Aeronautics (HAL), among other defence-related companies, rallied up to 7.6 per cent in Thursday's intraday trade.

Stocks of companies involved in the defence sector climbed a day after the government's Cabinet Committee on Security cleared major deals for building two nuclear submarines indigenously, apart from buying 31 predator drones from the US.

At around 11:49 AM, among major defence stocks, Mazagon Dock shares were up 7.56 per cent, Garden Reach Shipbuilders was up 7.43 per cent, Bharat Dynamics rose 3.48 per cent, Cochin Shipyard was up 2.84 per cent, HAL was up 2.85 per cent, Bharat Electronics was up 2 per cent, and Ideaforge Technology had climbed 1.48 per cent. 

In comparison, the BSE Sensex was up 0.19 per cent at 81,625.59 at around the same time. 

With this approval, the Indian Navy will get two new nuclear-powered attack submarines which will boost its underwater deterrence capabilities manifold in the Indian Ocean Region.

The cost to build the two submarines is pegged at Rs 45,000 crore, and they will be built at the ship building center in Vishakhapatnam. The project will also see involvement of private sector firms like Larsen and Toubro, as per ANI.

Shares of L&T were up 0.52 per cent at Rs 3,504.6 per share on the BSE at around 11:49 AM. 

The approval for the deals had been hanging fire for a long time, despite the push from the Indian Navy to fill the critical gaps it its underwater deterrence capabilities.

Meanwhile, as a part of its submarine induction plans, India has plans to have six boats in the long run. These boats are going to be built under an advanced technology vessel project. They are separate from the five nuclear submarines being built under the Arihant class at the same location.

Another deal cleared by the CCS was for the acquisition of 31 predator drones from American General Atomics under a Foreign Military Sales contract between the two governments.

The deal clearance was due before October 31, as the validity of the American proposal was till that time and now it is going to be signed in the next few days. READ MORE