HAL, BEL, Paras Defence And Other Defence Stocks Gain Up To 4% After DAC Clears Military Procurement Proposals Worth ₹2.12 Lakh Crore

Shares of defence companies moved higher on Tuesday after the Defence Acquisition Council (DAC) approved capital acquisition proposals worth around ₹2.12 lakh crore on 26 October.

Hindustan Aeronautics Limited (HAL) and Bharat Electronics Limited (BEL) gained around 2% each on the Bombay Stock Exchange (BSE), while Paras Defence and BEML, along with Astra Microwave Products, rose by up to 4%.

The approvals cover equipment for the Indian Army, Navy and Air Force, with the government looking to advance military modernisation. According to the Ministry of Defence, around 82% of the proposed procurement will be sourced from Indian industry.

The DAC has granted Acceptance of Necessity (AoN) for the proposals. This is an initial approval for procurement and does not mean that all the orders have been placed.

At 11:04 AM, the HAL share price on the BSE stood at ₹4,845.85, down 1.44%. At the same time, BEL share price stood at ₹371.10, up 2.23%. Paras Defence share price stood at ₹1,307.20 apiece, up 4.27%. The Nifty Defence Index stood at 8,856.2, up 2.24%.

Army And Air Force To Get New Helicopters, Drones And Air Defence Systems

The Army's approved proposals include High Mobility Vehicles, Self-Propelled Tracked Gun Systems, Gun Shot Response Systems and Very Short-Range Air Defence Systems. The list also covers Light Multi Role Helicopters, counter-drone systems, surveillance unmanned aerial vehicles (UAVs), long-range unmanned aerial systems and kamikaze drones.

The Air Force has received clearances for helicopters, air-defence systems, weapons and mobile X-band Doppler weather radar systems. Special Utility Helicopters are intended to meet air-transport requirements, while the radar systems will provide localised weather surveillance in forward areas.

One of the major proposals is the procurement of 200 Light Multi Role Helicopters for the Army and Air Force, estimated at around ₹20,000 crore, according to an ANI report citing defence officials.

The helicopters are expected to be manufactured in India, with domestic companies leading the programme. The contract could be split between the lowest bidder and the second-lowest bidder, the report said.

Tata-Airbus and Adani Group-Leonardo are among the potential contenders, while US-based Bell Helicopters is also expected to offer its helicopter, ANI reported. The programme is intended to replace the ageing Cheetah and Chetak fleets, with around 400 helicopters scheduled for retirement in the coming years.

Navy Procurement To Include Anti-Missile Defence Systems

For the Indian Navy, the DAC cleared proposals for Active Offboard Decoy Systems (AODS) and other naval platforms. AODS are designed to help protect naval vessels against incoming anti-ship missiles by drawing them away from their intended targets.

The other platforms will be designed and built domestically, with the aim of strengthening the Navy's combat capabilities and upgrading its warfare systems.

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