Indo-US naval deal takes shipyard scrip to cloud 9

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By S Jha

New Delhi, July 10: Since the conclusion of the US visit by Prime Minister Narendra Modi, the shipyard firm is making new high each day, closing at a record peak on Monday with 10 per cent upper circuit. The foreign publications have begun speculating and analyzing the possibility of India emerging as a naval base for the US warships.

The para 14 of the joint statement issued after the conclusion of the summit meeting of Modi with US President Joe Biden spoke of “…the access to the US naval ships to Indian shipyards for repair and maintenance is something which not even accorded to erstwhile Soviet Union/Russia despite Treaty of Peace, Friendship and cooperation between the two nations”.

The joint statement para 14 stated “President Biden and Prime Minister Modi welcomed India’s emergence as a hub for maintenance and repair for forward deployed U.S. navy assets and conclusion of Master Ships Repair Agreement with Indian shipyards”.
This is in departure to India so far denying any space to the American requests even during the Iraq War and in the aftermath of 9/11 for logistics support. “The para 14 gives de-facto basing rights to the US Navy in Indian ports, and it has consequences for India’s strategic autonomy,” said a strategic affairs commentator.

It may be noted that the US navy assets dot the vicinity of the Taiwanese straits and South China Sea, and they could be just hours away for repair works from the Andaman and Nicobar Islands in the Bay of Bengal.

But Mazgaon Dock Shipbuilders is flying and there is no complaint from its shareholder. In one year, from July 11 2022 level of Rs 261, Mazgaon Dock Shipbuilders has zoomed to Rs 1454 per share. From the day of the issue of the joint statement in Washington DC, the scrip has gained over 30 per cent.

It’s trading at a PE value of 26. This company has also been in the news last month for a deal with a German firm to manufacture nuclear submarines. With India and China rivalry playing out, experts claim that India will have to rapidly add more nuclear submarines in the next few years. It has been trending ever since declaring its quarterly results, which showed income and profit margin expanding.