Shares of Larsen & Toubro (L&T) fell by 1% on January 25 after reports suggested its bid for India’s Rs 70,000 crore P75(I) submarine project was disqualified. Meanwhile, shares of Mazagon Dock Shipbuilders (MDL) surged over 5% to Rs 2,411, as it emerged as the sole qualifying contender for the project.
The P75(I) project, covered under the modernization program of India’s defense, encompasses the construction of six new-generation conventional submarines with advanced air-independent propulsion systems for higher endurance levels underwater.
L&T in partnership with Spain’s Navantia, and MDL, in partnership with Germany’s Thyssenkrupp Marine Systems, bid for the project. A technical oversight committee found the bid by MDL qualified the eligibility criteria, while the bid placed by L&T was reportedly disqualified.
Despite these reports, no final decision has been taken yet. CNBC TV18, quoting government sources, said the Defence Acquisition Council is likely to meet soon to decide on the selection of the bidder.
Mazagon Dockyards’ qualification has fanned optimism among investors since the project is considered crucial for enhancing India’s naval strength amidst increasing regional tensions and the growing naval presence of China. The opening of the commercial bid offered by MDL is to be followed by negotiations on the technical and financial aspects, after which, once the competent authorities have given their assent, the contract will probably be granted. It is likely to be seven years after the inking of the deal that the first submarine would emerge from the waters.
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Source: Moneycontrol
News Desk
