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.

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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.

Besides Mazagon Dock, shares of Bharat Dyamics also gained as much as 6 percent to Rs 1,144.3, snapping a three-day losing streak in the process.

Shares of Cochin Shipyard are trading with gains of as much as 7 percent and are up for the fifth day in a row. The stock is also nearing its 52-week high of Rs 687.

Stocks like Bharat Electronics and Astra Microwave are also trading with gains of 2 percent each.

First Published:Jul 11, 2023 11:06 AM IST