Russian order raises Pipavav Defence by 6%

Shares of ship builder and defence major Pipapav Defence and Offshore are up 6% at Rs. 63.45, with heavy volumes on both the exchanges. BSE has, so far, seen volumes of over 18 lakh shares (verses 2-week average of 1.2 lakh shares) while NSE has recorded volumes of a whopping 90 lakh shares, against 2 week average traded quantity of 3.5 lakh shares.

As per news reports, Russian Government has chosen Pipavav Defence as a partner to execute a govt-to-govt order, estimated over US $ 3 billion, for building 3-4 upgraded Talwar class frigates, for delivery over 6-8 years. This order, the largest ever for private warship building is likely to be signed in FY16 and is significant both politically and for the company in particular.

It will be the first major win for the Modi Govt’s ‘Make in India’ initiative in its most preferred and strategically vital defense sector, as also, it will be the first landmark order for the company, post its take-over by ADAG group from the Gandhi brothers. The order goes to re-affirm Pipavav’s strength and infrastructure capabilities, which surpassed that of L&T, in this particular project.

This order could be a potential game-changer for the company, its promoter ADAG group, Indian Government’s policy initiatives and can strengthen Image of India before the developed world, at large.