GRSE shares up over 10 percent after emerging as L1 bidder for Rs 25,000 crore Naval warship contract

India’s defence firms post solid Q4; analysts warn on valuations, order visibility

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26 Aug, 2025 12:21

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Shares of shipbuilder Garden Reach (GRSE) were sharply higher by over 10 percent on May 22 after the company said in an exchange filing that it has emerged as the lowest bidder for an over Rs 25,000 crore contract to build eight next generation Corvettes for the Indian Navy.

Gains were also seen in other shipbuilding shares, including Mazagon Dock and Cochin Shipyard.

GRSE had attended the Commercial Negotiation Committee (CNC) meeting convened by the Defence Ministry for eight Next Generation Corvettes (NGC) on May 21.

"During the meeting, the Commercial bids were opened and it was noted that GRSE become the Lowest bidder (L1) for Construction of Next Generation Corvettes (NGC) for Indian Navy. The L1 bidder will be awarded five NGC ships at a likely value of more than Rs 25,000 crore," the company filing said.

This L1 win is equal to GRSE's orderbook of Rs 23,877 crore as of February 2025.

GRSE had said in the past the Corvette is a 'high-value' order, something which the shipyard is 'eagerly looking forward to'.

After emerging as the L1 bidder, it will take around six months for the contract to be signed, GRSE said, and the revenue recognition from the project is expected to commence from 2027. "...as far as Corvettes are concerned, we have mastered the construction of Corvettes. Nine Corvettes, both missile surface as well as ASW, are currently running in the Navy, and all Nine are built by GRSE," Commodore PR Hari has said.

GRSE's CMD said in February that the future bids for Naval orders will work in favour of the shipbuilder, as they would accrue as the current orderbook begins to dip.

"P-17 Bravo, by end of the calendar year, that means 2025 end, the RFP could come out. From RFP to L1 determination, it could take, having seen the experience of Next Generation Corvettes (NGC), it could take around 7 months from the RFP to price bid opening. And from there, six months for contract signing and two years for revenue recognition, which means if P-17 Bravo comes through, the revenue recognition will start from 2029," said the CMD. The P-17 Bravo refers to a proposed advanced, stealth guided-missile frigates for the Indian Navy.