ACCELERATING FORTUNES AT INDIA'S LARGEST DEFENCE SHIPBUILDER

Unlike many PSU stocks, Mazagon Dock Shipbuilders' stock has risen steadily. That was until July of this year, after which the stock shifted to an exponential gear. The stock has doubled during the last 12 months and it is no wonder really as MDS is eyeing Rs. 1.59 trillion worth of orders from Indian Navy, after having launched its stealth frigate Taragiri recently, and with Navy's 5th Scorpene submarine all set to be delivered by December end. MDS' plans to sell 10% additional stake in the company is also expected to be well received by the market. Since 2019, Mazagon Dock Shipbuilders Ltd (MDL) is led by its Chairman & Managing Director, Vice Admiral Narayan Prasad, who retired from the Indian Navy after a chequered career of over 36 years that saw him winning the Ati Vishisht Seva Medal and the Nav Sena Medal for his exemplary service to the Indian Navy.

Indian Navy’s recently launched warship, Taragiri, speaks volumes about the capabilities that its builder Mazagon Dock Shipbuilders have garnered in recent years. Taragiri is a stealth frigate, which means it is a warship that uses stealth technology in its construction process so that the ship is harder to detect by the enemy by various detection techniques including radar, infrared, sonar and visual methods. But don’t ever think that being designed to operate in such a stealth mode, makes Taragiri anywhere near small or slow. Technically, frigates fall between the larger destroyer class warships and the smaller corvettes, and to an extent combine the best of both worlds - the destroyer’s defence & attack capabilities and the corvette’s speed and agility. This latest frigate to be launched by MDL is nearly 150 metres long and almost 18 metres wide, with a launch weight of 3510 tons. It is propelled by a CODOG system that can achieve 28 knots or nearly 52 km/hour at a displacement of 6670 tons, when needed.

CODOG stands for ‘Combined Diesel Or Gas’ which is a type of modern propulsion system for ships that need a maximum speed that is considerably faster than their cruise speed, and is particularly used in warships like modern frigates or corvettes. The CODOG system in Taragiri uses a combination of two Main Diesel Engines for normal cruising and two Gas Turbines which are used for emergency sprinting.

Mazagon Dock Shipbuilders Ltd (MDL) is led by its

Chairman & Managing Director, Vice Admiral Narayan Prasad, who retired from the Indian Navy after a chequered career of over 36 years. He is an alumnus of Sainik School Tilaiya, National Defence Academy, Jawaharlal Nehru University, Naval College of Engineering (INS Shivaji, Lonavala), University of Pune and University of Mumbai. A postgraduate in both engineering and humanities, Vice Admiral Narayan Prasad has also been awarded Ati Vishisht Seva Medal and Nav Sena Medal for his exemplary service to the Indian Navy.

Taragiri is the third warship in the Indian Navy’s Project 17A that was set up to build seven warships of stealth frigate class with guided missile capabilities, at a total cost of around Rs 25,700 crores.The first ship of Project 17A, Nilgiri, was launched on September 28, 2019, and is expected for sea trials in the first half of 2024. The second ship of the Udaygiri class under the project was launched on May 17 this year. It is expected to start sea trials during the second half of 2024.

The keel of Taragiri was laid on September 10, 2020, and it was launched two years later, on September 11 2022, and the ship is expected to be delivered by August 2025. And the keel of the fourth ship under project 17A was laid on June 28, this year. The construction of all these four ships had been awarded to Mazagon Dock Shipbuilders, whereas the remaining three ships were given to GRSE.

What makes the construction and launch of Taragiri such an impressive feat for MDL is however other factors. Firstly, it is the first warship of this class to be built by MDL by the latest integrated modular construction methodology that greatly enhances construction speed by leveraging diverse capabilities of geographically dispersed shipbuilding facilities. In other words, the hull blocks were constructed in different MDL facilities at different geographical locations and the final integration and erection being done on the slipway at MDL’s central yard at Mazagon.

Secondly, the construction of Taragiri witnessed an amazing level of coordinated efforts spearheaded by MDL, and involving several organizations and firms in the public and private sector. The warship’s overall design was by the Indian Navy's in-house design organization, Bureau of Naval Design. However, it was MDL that carried out the detailed design and construction which were overseen by the Warship Overseeing Team based at Mumbai.

The steel used in the hull construction of Taragiri is the indigenously developed DMR 249A which is a low carbon micro alloy grade steel developed and manufactured by SAIL, the leading steel PSU. Taragiri also has in its construction, diverse equipment and machinery sourced from India’s major industrial houses as well as from over one hundred MSMEs. Such detailed coordination of the project by MDL resulted in the indigenous content of Taragiri being approximately 75% which is above its predecessors, the P17 Shivalik class warships.

If you are wondering why there is a further time gap of three years from Taragiri’s recent launch (September 2022) to the final delivery (August 2025), wait till you hear about its ambitious weaponry that are yet to be fitted in. This stealth frigate will have state-of-the-art weapons, sensors, an advanced action information system, an integrated platform management system, world class modular living spaces, sophisticated power distribution system and a host of other advanced features. It will also be fitted with a supersonic surface-to-surface missile system.

The ship has impressive air defence capabilities too, which are designed to counter the threat of enemy aircraft and anti-ship cruise missiles. They include the vertical launch and long range surface to air missile system, while two 30 mm rapid-fire guns will provide the ship with close-in-defence capability. An SRGM Gun will enable Taragiri to provide effective naval gunfire support too. The indigenously developed triple tube light weight torpedo launchers and rocket launchers provide this warship’s antisubmarine capability.

If the launch of Taragiri was the highlight of MDL’s second quarter, in the first quarter it had launched two warships, the stealth frigate Udayagiri and a much bigger, missile destroyer of Visakhapatnam class, the INS Surat. The other warships of this class are INS Visakhapatnam, INS Mormugao & INS Imphal, and with INS Surat, MDL and Indian Navy will be completing the fourth and last destroyer of this class.

INS Surat is a stealth guided-missile destroyer whose keel was laid down in 2018. Built at two different geographical locations using the block construction methodology involving hull construction and joining together at MDL, Surat was launched on 17 May 2022 by MDL and the warship is expected to be commissioned by 2025.

The third quarter will also witness a major delivery by MDL. After having delivered four Scorpene class submarines to Indian Navy already, December end will witness the delivery of Vagir, the 5th Scorpene class submarine, whereas the fourth quarter or the first quarter of next fiscal will see the delivery of the 6th Scorpene Class Submarine, Vagsheer. Both these submarines have already been launched by MDL. With such a steady stream of launches and deliveries in the pipeline, there is no wonder that the MDL stock is going northwards at an exponential pace now. MDL is also eyeing Rs. 1.59 trillion worth of fresh orders from the Indian Navy. MDL’s plans to sell a 10% additional stake in the company is also expected to be well received by the market, due to its soaring performance in recent quarters.