India’s $8 Billion Submarine Deal Dangles a Lifeline for Thyssenkrupp’s Troubled Stock

The sight of India’s Defence Minister Rajnath Singh standing beside a Type 212 submarine at Thyssenkrupp Marine Systems’ Kiel shipyard on Wednesday was more than a diplomatic photo opportunity. It was the clearest signal yet that Europe’s largest submarine builder is closing in on one of the most coveted naval contracts in the world.

Singh, accompanied by German Defence Minister Boris Pistorius, toured the facility on April 22 as part of a three-day visit to Germany that also saw both nations sign a defence industrial cooperation roadmap and an agreement on UN peacekeeping missions. But the main event was the inspection of the Type 212 — a vessel renowned for its stealth capabilities and underwater endurance — which sits at the heart of India’s ambitious Project 75I.

That project calls for the construction of six diesel-electric attack submarines equipped with air-independent propulsion systems, to be built in India at an estimated cost of $8 billion. Thyssenkrupp Marine Systems is considered the frontrunner. Under the proposed structure, TKMS would provide engineering, design and advisory support while India’s state-owned Mazagon Dock Shipbuilders handles construction and delivery — a model that satisfies New Delhi’s insistence on high local content.

Pistorius expressed confidence that a deal could be finalised within the next three months, suggesting negotiations have advanced further than previously understood. For Thyssenkrupp, the timing could hardly be more critical.

Should investors sell immediately? Or is it worth buying Thyssenkrupp?

The company’s steel division, Steel Europe, remains a millstone. The restructuring of that business is burning through cash at an alarming rate, with management forecasting a net loss for the current fiscal year of between €400 million and €800 million. The transformation of the steel operations continues to dominate the group’s finances and weigh heavily on investor sentiment.

That has created a stark divide on the sell side. Jefferies has an “buy” rating on the stock with a price target of €13, betting that successful restructuring will drive strong operating profits by 2026. Barclays takes the opposite view, rating the shares “sell” with a target of €9, pointing to the persistently high costs of the corporate overhaul.

The market is currently siding with the bears. Thyssenkrupp shares trade at €8.84, having lost nearly nine percent since the start of the year. The stock is also trading below its 50-day moving average, a technical indicator that suggests near-term weakness.

A win in India would change that narrative overnight. A contract of this magnitude — among the largest in the international submarine business in years — would inject billions in revenue and provide a powerful counterweight to the steel division’s losses. But the path to a final signature remains uncertain, and until then, the cost of fixing the steel business will continue to dictate the stock’s direction.