Defence stock including Hindustan Aeronautics Limited (HAL), Bharat Forge, MTAR Technologies, and others saw sharp intradya gains on Friday, February 16, after the Defence Acquisition Council (DAC) approved contracts worth approximately ₹84,560 crore, for enhancing India’s defence requirements and infrastructure. The DAC, chaired by Defence Minister Rajnath Singh approved the proposals during its latest meeting. The council is responsible for the procurement and acquisition of weapons and equipment for the Indian military.
DAC’s over ₹80,000 crore-sanctioned project details:
The proposals cleared by the DAC include 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. A proposal to procure air defence tactical control radar was also approved with an aim to strengthen the air defence systems, especially the capabilities to detect slow, small and low-flying targets.
The DAC has approved procurement of medium range maritime reconnaissance and multi-mission maritime aircraft for strengthening the surveillance and interdiction capabilities of the Indian Navy and the Indian Coast Guard (ICG).
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The Rajnath Singh-led panel also approved a proposal to buy nine maritime surveillance aircrafts for the Indian Navy and six maritime patrol aircraft for the ICG. The 15 maritime patrol planes would be built upon the Made in India C-295 transport aircraft and the cost of the project is around ₹29,000 crore.
The DAC has accorded Acceptance of Necessity (AoNs) under the Buy {Indian-Indigenously Designed Developed and Manufactured (IDDM)} category for procurement of a new generation of Anti-tank mines having seismic sensors and provision of remote deactivation with additional safety features.
The DAC said that this will fulfil the requirement of the ICG for having high-speed communication with secure networking capability for seamless information exchange between the ICG and the Indian Navy units. The DAC also accorded AoN for the procurement of Flight Refueller Aircraft for enhancing the operational capabilities and reach of the Indian Air Force (AIF).
Further, to strengthen the Air Defence Systems, especially the capabilities to detect slow, small and low-flying targets as well as surveillance, detection and tracking of different targets, the AoN has been accorded for procurement of Air Defence Tactical Control Radar under Buy (Indian-IDDM) category.
In the recent Interim Budget, the central government allocated ₹6.21 lakh crore for the defence sector. This marked a 4.72 per cent increase from the previous year’s allocation of ₹5.94 lakh crore. The allocation for the defence sector constituted approximately 13 per cent of the total budget presented by Union Finance Minister Nirmala Sitharaman in the Parliament on February 1.
Defence Stocks Today
On Friday, shares of state-owned defence major HAL opened at ₹3049.95 and gained around two per cent to hit an intraday high of ₹3105.65 against a 52-week high of ₹3,130.00 apiece on the BSE. Similarly, shares of Paras Defence and Space Technologies Ltd also traded positive earlier today.
MTAR Technologies and Bharat Forge saw sharp gains by rising around three per cent each today with the development of the DAC approvals. Shares of MTAR Technologies settled 3.32 per cent higher at ₹1,933.25 apiece on the BSE. Bharat Forge also gained around two per cent to hit a day’s high of ₹1,136.40 apiece on the BSE.
Shares of Data Patterns (India) rallied as much as nine per cent to hit ₹2,035.15 apiece on the BSE on the news of the DAV approvals and over the company’s block deals earlier today. Data Patterns (India) settled 8.79 per cent higher at ₹2,018.30 apiece on the BSE. Bharat Electronics Ltd (BEL) also gained around two per cent to hit a day’s high of ₹190.40 apiec on the BSE.
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