PSU stock surges 20% after signing MoUs worth nearly 7x of market capitalisation, modernisation plans

Shares of Dredging Corporation of India Ltd., the state run company, surged as much as 20% on Monday, November 3, after it signed multiple MoUs during the India Maritime Week, and also received a modernisation plan from the government.

Dredging Corporation announced in an exchange filing that it has signed 22 MoUs with 16 organisations during the India Maritime Week, which was held between October 27-31. The MoUs signed are worth ₹17,645 crore, which is nearly seven times the company's overall market capitalization of close to ₹2,500 crore.

The MoUs were signed with the Visakhapatnam Port, Paradeep Port, Jawaharlal Nehru Port, Paradip Port, and other major ports, including those in Chennai, Mumbai and Kochi, for catering to their dredging requirements for the next two to five years.

In addition to these MoUs, there was also an investment worth ₹4,000 crore announced for the modernization of Dredging Corporation for the construction of 11 dredgers, along with upgradation, automation and development of skilled manpower.

The management of Dredging Corporation also said that the MoUs will help the company cater to the dredging requirements, upgrade their existing fleet, and a host of other steps. The addition of new fleet would boost Dredging Corp's position to increase its market share.

The Deendayal Port, JNPT, Paradip Port Trust and the Visakhapatnam Port Trust jointly have a 73% stake as promoters of Dredging Corp.

Shares of Dredging Corporation of India are currently trading in a 20% upper circuit at ₹889.35. The stock has gained in four out of the last five trading sessions, during which it has gained 42%.