Larsen & Toubro Ltd (L&T) shares fell as much as one percent on Thursday, while Mazagon Dock Shipbuilders Ltd shares surged over 5 percent to Rs 2,411 after reports that L&T’s bid for India’s Rs 70,000 crore P75(I) submarine project was disqualified, leaving Mazagon Dockyards Ltd (MDL) as the sole qualifying contender.
L&T has been vying for a share of the multi-billion-dollar defence manufacturing programme aimed at boosting indigenous capabilities. The disqualification weighed on its stock, which fell 1 percent to Rs 3,485 in the late morning trade; but it later pared losses to trade at Rs 3,500 after another report said no final decision was taken yet.
According to a CNBC TV18 report citing government sources, bids were submitted by two groups for the project: L&T in partnership with Spain’s Navantia, and Mazagaon Dockyards in partnership with Germany’s Thyssenkrupp Marine Systems. A technical oversight committee of the Ministry of Defence reviewed the bids and found that only Mazagaon Dockyards’ proposal met the eligibility criteria.
However, despite Mazagaon Dockyards’ qualification, no final decision has been made yet, said the CNBC TV18 report. The Defence Acquisition Council (DAC) is expected to convene soon to take a final call on selecting the bidder.
Mazagaon Dockyards’ bid involves building six next-generation conventional submarines in India with significant technology transfer. The vessels will include air-independent propulsion (AIP) systems, enhancing stealth capabilities by allowing them to remain submerged for up to two weeks.
The project is crucial for bolstering India’s naval strength amid growing regional competition, particularly with China’s rapid naval modernisation. Strategic discussions have also explored the possibility of splitting the project between shipyards to expedite delivery timelines.
With technical clearance secured, the next stage will involve opening the commercial bid submitted by Mazagaon Dockyards, followed by detailed discussions on technical and commercial terms. The final proposal will then be sent to the competent authorities for approval. The first submarine is expected to enter service seven years after the contract is signed.
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