Mumbai: Shares of domestic shipbuilding companies on Friday hit the upper circuit after the government issued new guidelines for the shipbuilding industry.

Bharati Defence and Infrastructure Ltd (formerly Bharati Shipyard) hit 20% upper circuit, while ABG Shipyard Ltd hit 10% upper circuit.

Debt-laden Bharti Defence touched a high of 27.05 apiece, while ABG Shipyard touched a high of 26.25 a share. So far this year, Bharti Defence has fallen 5.2%, while ABG Shipyard is down 64%.

Indian shipyards must have a positive net worth if they are to become eligible for exercising a so-called right of first refusal to build/repair ships for government departments/agencies including state-run firms, according to new guidelines issued by the shipping ministry, Mint reported.

The shipbuilding policy approved by the cabinet grants a right of first refusal to Indian shipyards on government purchases and ship repairs, whereby local shipbuilders can take up state-funded contracts/works by matching the lowest price offered by overseas entities in a public auction, the report added.

Meanwhile, shipping companies were also trading higher. Shipping Corp. of India rose 1.7%, Great Eastern Shipping Co. Ltd rose 0.8%, Mercator Ltd rose 1% and Shreyas Shipping and Logistics Ltd rose 1%.