Mazagon Dock Shipbuilders has signed a landmark deal with the Andhra Pradesh government to develop a greenfield shipyard project at Dugarajapatnam, marking a significant milestone in India's maritime infrastructure development. The Navratna defence PSU announced that the shipbuilding-cum-port cluster will be developed under the central government's Shipbuilding Development Scheme (SbDS), a flagship drive aimed at positioning India as a global shipbuilding hub. The project is anticipated to attract an investment of ₹15,000 crore over the next 5-7 years, subject to requisite approvals and clearances, with the shipyard expected to generate about 45,000 direct and indirect jobs in the state. As per the Techno-Economic Feasibility Report (TEFR), the shipbuilding and ship repair yard is estimated at ₹29,254 crore and the port at ₹9,513 crore.
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The National Shipbuilding and Heavy Industries Park-AP (NSHIP-AP) has selected Mazagon Dock Shipbuilders to develop the cluster, with NSHIP-AP being a special purpose vehicle (SPV) formed jointly by the Andhra Pradesh Maritime Board (APMB) and the Visakhapatnam Port Authority (VPA). The shipyard will have a design capacity of 1.2 million gross tonnage per annum, with provision for further expansion based on market requirements, catering to a broad range of commercial vessels including tankers, bulk carriers, container ships, LNG carriers and other large specialised vessels. Chief Minister N Chandrababu Naidu emphasized that Andhra Pradesh remains committed to being at the forefront of the nation's vision to become one of the top five shipbuilding nations by 2047.
Mazagon Dock Shipyard shares have declined 9.1 per cent so far this year while the Nifty 50 has dropped 10.7 per cent, reflecting broader market challenges. However, the defence PSU stock has more than doubled in the past three years (107.3 per cent return), outperforming the market benchmark's 16 per cent return. Defence sector stocks have shown mixed performance with HSBC noting that rich valuations create elevated earnings growth expectations. Hindustan Aeronautics shares are trading 0.3% lower at ₹4,680, down 7.5% in the last month, while BEL shares gained 1.6% to ₹389 despite being down 6% monthly. Mazagon Dock's stock added 1.59% to settle at ₹2,252 on the BSE following the latest MoU announcement.
