Shipbuilders' Stocks Mazagon Dock, Cochin Shipyard, GRSE In Focus After Govt's Rs 44,700 Crore Push

Shares of shipbuilding companies such as Mazagon Dock, Garden Reach Shipbuilders & Engineers and Cochin Shipyard will be in focus heading into trade on Monday after the government announced a massive push to boost domestic maritime industry.

The announcement came on Saturday from the Ministry of Ports, Shipping & Waterways (MoPSW), which will undertake two major shipbuilding initiatives - Shipbuilding Financial Assistance Scheme (SBFAS) and the Shipbuilding Development Scheme (SbDS).

The two projects will come at a combined cost of Rs 44,700 crore, which could serve as a massive boost for the shipbuilding industry, including companies such as Mazagon Dock, Garden Reach Shipbuilders & Engineers and Cochin Shipyard.

As part of the Shipbuilding Financial Assistance Scheme, the government will spend around Rs 24,736 crore to provide financial assistance ranging from 15-25% per vessel. The scheme introduces graded support for small normal, large normal and specialised vessels, the government confirmed through a Press Information Bureau filing.

The scheme provides for the establishment of National Shipbuilding Mission, with the aim of streamlining co-ordinated shipbuilding initiatives.

Over the next decade or so, SBFAS is expected to support projects worth Rs 96,000 crore in order to boost domestic manufacturing.

Meanwhile, the Shipbuilding Development Scheme, with an outlay of Rs 19,898 crore, will look to help entities build long-term capacities.

The scheme will provide assistance to companies for building greenfield shipbuilding plants as well as the expansion and improvement of existing brownfield plants.

"Under SbDS, greenfield shipbuilding clusters will receive 100% capital support for common maritime and internal infrastructure through a 50:50 Centre–State special purpose vehicle," the statement said.

Existing shipyards, meanwhile, will receive 25% capital assistance for brownfield expansion.

These initiatives could serve as a major positive for shipbuilding companies, thus putting stocks like Mazagon Dock, Garden Reach Shipbuilders & Engineers and Cochin Shipyard in focus heading into trade today.