Defence sector stocks rallied up to 9 percent on Tuesday on reports that the Defence Procurement Board has approved a proposal to buy 26 Rafale fighters and Scorpene submarines for the Indian Navy.
Sources with knowledge of the matter told CNBC-TV18 that under the proposal, three additional submarines would be built at Mazagon Docks. The defence PSU has already built other submarines of the class.
A meeting of the Defence Acquisition Council will be held on Thursday, July 13, to decide on the final approval for the deals.
The deals to acquire 26 Rafale fighters and Scorpene submarines are expected to be announced during the visit of Prime Minister Narendra Modi to France on July 13-14.
Defence PSU stocks have surged following CNBC-TV18's report.
Mazagon Dock in particular have surged as much as 10 percent to Rs 1,584.4. The stock is trading at a record high and has gained nearly 20 percent over the last three trading sessions.
The stock of Mazagon Dock has added over Rs 5,500 crore to its market capitalisation over the last three trading sessions.
