Defence stock: Garden Reach Shipbuilders bags ₹840 cr order from govt; shares up 3%

Kolkata-based warship building PSU Garden Reach Shipbuilders & Engineers Ltd (GRSE) has signed a contract worth ₹840 crore with the Ministry of Earth Sciences' National Centre for Polar & Ocean Research (NCPOR) for the construction and delivery of an Ocean Research Vessel (ORV).

Amid the development, shares of aerospace & defence PSU Garden Reach Shipbuilders & Engineers closed 2.51% at ₹2,560.25 on the BSE today after surging to the day's high of ₹2,589. At the current share price, the company's m-cap stands at ₹29,328.18 crore.

The company says it has the necessary expertise in survey vessels and has been building them for the Indian Navy for nearly four decades. "Even now, the Marine Acoustic Research Vessel INS Sagardhwani that was built by GRSE in 1994 is being refined at the shipyard. On December 4, 2023, GRSE delivered the INS Sandhayak – the largest survey vessel to be built in India- to the Navy."

The development comes amid the defence ministry notifying the fifth Positive Indigenisation List consisting of 346 items for Defence Public Sector Undertakings. In a boost to Aatmanirbharta in defence and minimising imports by the DPSUs, the defence ministry today notified the fifth PIL. "Hindustan Aeronautics Limited (HAL), Bharat Electronics Limited (BEL), Bharat Dynamics Limited (BDL), BEML Limited, India Optel Limited (IOL), Mazagon Dock Shipbuilders Limited (MDL), Goa Shipyard Limited (GSL), Garden Reach Shipbuilders & Engineers Ltd (GRSE) and Hindustan Shipyard Limited (HSL) are the DPSUs involved in defence items of the fifth PIL," the ministry says.

The fifth PIL include strategically important line replacement units or systems or sub-systems or assemblies or sub-assemblies or spares, and components and raw materials, with import substitution value worth ₹1,048 crore.

GRSE says three more vessels of this class are currently at various stages of completion at the shipyard. "This experience will stand GRSE good when designing and building the ORV for NCPOR." The overall length of the ORV will be 89.50‐metre and it will be 18.80‐metres wide. Its depth will be 12.50 metres. The ship will have a gross tonnage of 5,900 tonnes and its speed will be 14 knots at 90% maximum continuous rating (MCR). The research vessel will operate at a maximum depth of 6,000 metres.

The vessel, once it is delivered, will be capable of Underway Swath Multi-beam as well as Geophysical Seismic surveys in coastal seas and deep waters. It will also be able to carry out conductivity, temperature and depth (CTD) profiling and water sampling operations such as biological sampling using vertical and horizontal methods through various nets. The ORV will also effectively carry out surface and deep‐sea mooring and data buoy operations, seabed sampling using corers and grabs as well as rock dredging with chain bag dredges.

It will also undertake atmospheric observations, surface meteorological and current measurements and collect upper air data. It will also be able to deploy and retrieve heavy test or protocol‐type equipment and submersibles such as AUVs and ROVs. "Scientists will be able to carry out analytical work and data processing on board. The ship will also provide training and education to scientists and technicians."

GRSE is fast turning into a destination for those eying specialised vessels. Recently, Bangladesh also signed an agreement with the shipyard for an advanced tug for its Navy. GRSE is also building a dredger for Bangladesh, four multi-purpose cargo vessels for a German company, and 18 warships for the Indian Navy.