Miniratna PSU Jumps 9% on Signing Deal with Defence Ministry

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Miniratna PSU Jumps 9% on Signing Deal with Defence Ministry
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the state-owned naval vessels builder Garden Reach Shipbuilders (NS: GRSE ) & Engineers Ltd rallied 8.9% to Rs 474 apiece on Friday and closed the session 4.51% to Rs 455 apiece after the company announced signing a contract worth Rs 3,500 crore with the Ministry of Defence.

Garden Reach Shipbuilders & Engineers is a premier Warship building company, under the administrative control of the Ministry of Defence, and awarded the Miniratna Category 1 status.

The defence public sector undertaking (PSU) has signed a project with the defence ministry for constructing four next-generation offshore Patrol Vessels (NGOPV) having a length of approximately 110 m, with a displacement of around 2,900 tons and a maximum speed of more than 23 knots.

As per the details of the contract, Garden Reach is to deliver the first Vessel within 44 months from Contract Signing, with subsequent Vessels at intervals of 6 months.

The NGOPV should be capable of fulfilling roles including

  • Seaward Defence, 
  • NonCombatant Evacuation Ops (NEO),
  • ‘Out of Area’ Contingency Ops (OOAC),
  • Convoy Operations/Anti-Piracy Missions,
  • HADR,
  • Counter Infiltration Ops,
  • Fleet Maintenance Support,
  • Anti-Poaching/Trafficking,
  • Hospital Ship,
  • Search and Rescue Missions, and
  • COMINT Ship.

The small-cap PSU stock has rallied over 101% in the past year, making it a multibagger stock, and its shares have already skyrocketed 119.3% from their 52-week low value.

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