The Ministry of Defense is moving ahead with a multibillion-dollar program to build the next generation of conventional submarines in India, and MDL has passed technical trials to qualify and move on to the next stage of technical and commercial negotiations.
ET previously reported that the bid by MDL in partnership with Germany’s Thyssenkrupp Marine Systems (TKMS) was given the go-ahead by a technical monitoring committee that investigated the bidding process and trials conducted last year.
Meanwhile, a tweet posted by news agency ANI said that the bid submitted by Larsen & Toubro (L&T) for the project was rejected by the Defense Ministry as it was deemed non-conforming.
The Ministry of Defense signed an agreement with Mazagon Dock Shipyard (MDL), Mumbai, on January 24, 2024, for the acquisition of 14 Fast Patrol Vessels (FPV) for the Indian Coast Guard (ICG). The value of the contract is 1070.47 rupees. CR: Minister of Defense Office pic.twitter.com/wzO76bqQnL
— ANI (@ANI) January 24, 2024
Following the update, L&T shares fell 1.6 per cent to the day’s low of Rs 3,460.05 on the BSE.
As per the procurement process, the next stage will be to open commercial bids submitted by MDL. After passing the proposal, a detailed discussion on technical aspects and commercial terms will be held before the estimated Rs 43,000-crore proposal is moved to the competent authority for approval.
Additionally, the Navy had communicated that the latter product had several shortcomings after a series of tests on the requirements for a sea-proven air-independent propulsion system.
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Given the large scale of the project, six submarines will need to be built in India with a high degree of technology transfer, and the first new submarine is expected to enter service almost seven years after the contract is signed. A key feature the new submarine brings is the AIP system, which allows the submarine to remain underwater for up to two weeks, significantly increasing stealth.
Mazagon Dock stock price analysis
Mazagon Dock’s stock price has increased by 106.18% in the past year, while it has decreased by 6.75% in the past 6 months. In the short term, the price has increased by 12.52% in 3 months, 0.97% in 1 month, and 5.14% since the beginning of the year.
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