Pipavav Defence continues on its upward surge of 24th when it had breached the upper circuit of Rs.100.25. Today, it hit a new 52-week high at Rs.114, which was so close to its life time high of Rs.119.95, touched on 30th August 2010.

There was news last week that Reliance Defence, which owns 44% stake in Pipavav had got into a deal with a Russian defence company to make four frigates for the Indian Navy. The deal is huge – somewhere around Rs.60,000 crore, spread over the next 10 years.

This was unconfirmed news and the exchanges had asked for a clarification from the company. It issued a very generic, noncommittal clarification, stating that talks were on for multi-billion dollar contracts for building frigates and meeting other naval defence requirements for the country. But it neither denied nor agreed this deal. The market, usually when it is not a firm denial, assumes a “yes”. That explains the new high price today!