Mazagon Dock Shipbuilders surges 19% on signing of MSRA with US Government

MDL said the company has signed the Master Ship Repair Agreement (MSRA) with NAVSUP Fleet Logistics Center (FLC) Yokosuka, an entity of the US Government

Shares of Mazagon Dock Shipbuilders (MDL) hit a record high of Rs 2,383, surging 18.9 per cent on the BSE in Friday's intraday trade after the company signed the Master Ship Repair Agreement (MSRA) with NAVSUP Fleet Logistics Center (FLC) Yokosuka, an entity of the US Government.

In the past two trading days, the stock of MDL has rallied 29 per cent. Trading volumes on the counter nearly doubled, with a combined around 5.7 million equity shares changing hands on the NSE and BSE till the time of writing of this report. In comparison, the S&P BSE Sensex was up 0.33 per cent at 66,482 at 10:15 AM.

In an exchange filing, MDL said this is a Non-Financial Agreement. There are only two shipyards in the country, including MDL, that have signed the MSRA. The agreement is expected to open-up voyage repairs of US Navy Ships at MDL.

Meanwhile, in the past six months, the stock has zoomed 214 per cent as compared to 10 per cent rise in the S&P BSE Sensex.

MDL is principally engaged in building and repairing of ships, submarines, various types of vessels and related engineering products for its customers. The company, being a defence public sector undertaking (PSU), primarily engages in construction of warships and submarines for Indian Navy. Once delivered, MDL has no control over its products i.e. warships and submarines.

MDL is exploring the possibility for setting up a green field shipyard at its Nhava Yard in a phased manner with short term and long term developments plan. Short term development will enable MDL to facilitate the immediate use of the existing infrastructure for shipbuilding and ship repair business, whereas long term development will facilitate the construction of large size vessels and submarines including major refit and repairs.

To undertake the construction of advanced and next generation vessels, MDL intends to build a New Floating Dry Dock of 12000T capacity.