Defence Stocks Soar as India Approves $10 Billion Arms Procurement

19 Feb 2024 , 11:55 AM

Defence stocks witnessed a notable surge following the approval of capital acquisition proposals worth ₹84,560 Crore by the Defence Acquisition Council (DAC) aimed at enhancing the capabilities of the Armed Forces and Indian Coast Guard. The DAC, responsible for decision-making on new policies and capital acquisitions, greenlit a range of equipment acquisitions, including cutting-edge technologies vital for national security.

At 9:30 am on February 19, Bharat Electronics saw its stock trading at ₹192.30, marking a 2.12% increase, while Bharat Dynamics registered a gain of 1.93% with its stock priced at ₹1,742.95. However, Hindustan Aeronautics Limited (HAL) initially opened positively but later experienced a slight dip, trading at ₹3,064.10, reflecting a 0.4% decrease by 9:50 am.

The Ministry of Defence announced that the approved acquisitions encompass a diverse range of equipment, including new generation anti-tank mines, Air Defence Tactical Control Radar, Heavy Weight Torpedoes, Medium Range Maritime Reconnaissance and Multi-Mission Maritime Aircraft, Flight Refueller Aircraft, and Software Defined Radios.

Moreover, the DAC’s approval of amendments in the Defence Acquisition Procedure (DAP) 2020 aims to foster a conducive environment for defence start-ups and promote the procurement of advanced technologies from start-ups and Micro, Small, and Medium Enterprises (MSMEs) developed under the Innovations for Defence Excellence (iDEX) and Technology Development Fund schemes.

The increased budgetary allocation for defence in the February 1 Interim Budget for FY 2024-25, amounting to ₹1.72 Lakh Crore, reflects the government’s commitment to bolstering national security. Notably, a significant portion of this allocation, 27.67%, is designated for capital expenditure, underscoring the emphasis on modernizing defence infrastructure and enhancing operational preparedness.