Mazagon Dock and Other Defence Shares See Up to 6% Gains Amid Optimism Over Rajnath Singh's Germany Visit

Defence Minister Rajnath Singh Embarks on Three-Day Visit to Germany

On April 21, Defence Minister Rajnath Singh embarked on a three-day visit to Germany to finalise a bilateral defence industrial roadmap, sparking optimism in the defence sector. The visit is expected to provide a framework for the two countries to initiate co-development and co-production of various military hardware.

During his visit, Singh will hold wide-ranging talks with his German counterpart Boris Pistorius and other senior leaders in Berlin. The discussions will focus on enhancing defence industrial collaboration, strengthening military-to-military engagements, and exploring opportunities in emerging domains such as cyber security, artificial intelligence, and drones.

The defence and security ties between the two countries have been on an upswing. Defence exports from Germany to India have increased with the easing of export control and expeditious clearing of cases. There is a possibility that the two defence ministers may also finalise an inter-governmental agreement for supplying six stealth submarines to the Indian Navy.

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The visit has had a positive impact on defence shares, with the Nifty India Defence index trading 1.3% higher on April 21. Shares of Zen Technologies Ltd. gained as much as 11% on the same day as the company moves into the defence hardware business. Other gainers on the index were Data Patterns, Astra Microwave, and MTar Tech, which climbed 5%, 3.85%, and 3.1%, respectively.

German defence major ThyssenKrupp Marine Systems (TKMS) and Mazagon Dock Shipbuilders Ltd (MDL) are holding price negotiations with the defence ministry for an Euro 5 billion deal to supply six stealth submarines to the Indian Navy. The deal is being billed as one of the biggest 'Make in India' projects in recent years. Shares of Mazagon Dock were trading 1.8% higher on April 21.

The defence ministry said Singh's visit will provide an opportunity to review the ongoing defence cooperation and identify new avenues for collaboration between the defence industries of both countries. Singh is also expected to interact with key representatives of the German defence industry, with a view to promoting joint development and co-production under the 'Make-in-India' initiative.

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This visit of the defence minister comes after a gap of seven years, with the last visit by an Indian defence minister to Germany being by Nirmala Sitharaman in February 2019. Boris Pistorius had visited India in June 2023 and held extensive talks with Singh.