Shares of defence and related companies jumped up to 6% on the NSE after the Defense Acquisition Council (AON) accepted five capital acquisition bids totalling over Rs 21,772 crore.

The approved purchases include:

• an electronic warfare suite,
• a next-generation radar warning receiver,
• 120 fast interceptor craft,
• 31 water jet quick attack craft, and
• six sophisticated light helicopters.

It has also authorized overhauls of BMPs, T-72 and T-90 tanks, and Sukhoi fighter aircraft engines to prolong the service life of these assets.

Hindustan Aeronautics, Paras Defence and Space Technologies, Data Patterns (India), BEML, Bharat Dynamics (BDL), Bharat Electronics (BEL), Garden Reach Shipbuilders & Engineers (GRSE), and Mishra Dhatu Nigam (MIDHANI) all had intraday trade increases of between 2 and 6% on the NSE. 

These stocks have outpaced the market over the last month, rising between 8% and 17%, while the benchmark index has increased by 3%.

The tenders for all platforms and systems will be released in the upcoming time frame since the approvals have now been approved. According to ICICI Securities, 31 Water Jet Fast Attack Crafts and the fast interceptors’ crafts would primarily benefit companies like Garden Reach Shipbuilders & Engineers, L&T and Goa Shipyard, Cochin Shipyard, and Mazagon Dockyard.

While HAL would participate in the Advanced Light Helicopter bids and receive the electronics and missiles for the helicopters from BEL and BDL, the Electronic Warfare Suite deal would have the primary beneficiaries from BEL and Data Patterns, according to the trading business.

Beneficiaries of the overhaul tenders will include state-owned businesses like HAL and BEL. The main beneficiary for delivering titanium alloys and superalloys for the tender will be Mishra Dhatu Nigam, it further stated.

The aerospace and defence industrial industry is expected to generate Rs 1.75 trillion in revenue for the Ministry of Defence by 2025. Furthermore, the Ministry of Defence wants to export Rs 35,000 crore. Through its Defence Industrial Corridors (DICs), the Indian government also hopes to draw in Rs 20,000 crore in investment by FY 2025 in order to support the growth of the defence sector.

India’s aerospace and defence industry is changing quickly. It is a crucial component of the nation’s long-term strategic goals and objectives. India has a substantial market for both commercial and defence aircraft. According to MIDHANI’s FY24 annual report, the market was valued at USD 27.1 billion in the past and is projected to expand at a compound annual growth rate (CAGR) of 6.99% to reach USD 54.4 billion by 2033.

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