Shares of Garden Reach Shipbuilders & Engineers Ltd. dropped 3%, currently trading at ₹1,719.20 on concerns about delays in India’s ₹6 billion project to build six conventional submarines. According to Bloomberg, the project has stalled due to contractor objections over procedural violations during sea trials, delaying a critical naval modernization initiative as China strengthens its Indian Ocean presence.
The delays, which have already extended by a year, impact Prime Minister Narendra Modi’s defense acquisition policy that emphasizes local manufacturing and foreign technology partnerships. Garden Reach, alongside Mazagon Dock and Larsen & Toubro, is a key contender in this significant project.
Contractors have raised issues regarding procedural violations and unclear sea trial guidelines, further delaying the decision-making process. The Ministry of Defense has initiated an evaluation to address these complaints.
Investors are reacting to the potential revenue impact from the delay in this defense project. Both Garden Reach and Mazagon Dock have seen declines in their stock prices, reflecting market concerns over these developments.
