HAL's share price jumps 4% after India approves defence projects worth $1.2 billion
India is spending another ₹8.7 lakh crore ($1.2 billion) on defence projects after having already having approved ₹38.9 lakh crore ($5.5 billion) for arms projects last month. Last time around the lion’s share of the capital— around ₹31.1 lakh crore ($4.44 billion) — was directed towards the domestic industry. This time the entire amount is going to local manufacturers like Hindustan Aeronautics Limited (HAL) and Bharat Heavy Electricals Limited (BHEL). HAL's share price saw a jump over 4% as markets opened today morning. BHEL's share price on the other hand remained muted showing a marginal uptake of over 1%. The projects approved by the Defence Acquisition Council ( DAC) in its meeting today headed by India’s Defence Minister Rajnath Singh include new aircraft, more firepower for the Indian Navy, as well as approvals that will speed the procurement and upgrades of unmanned aerial vehicles (UAVs). The Indian Air Force (IAF) needs more eyes in the sky In July, the DAC approved the proposal to procure 21 new MiG-29 aircraft along with upgrading the existing 59 already enlisted with the Air Force. It also sanctioned buying 12 new Sukhoi-20 MK I aircraft. Pushing on the narrative of Athmanibhar Bharat, self-reliant India, the government has put an order for 106 of the newly developed Basic Trainer Aircraft from HAL. Initially, 70 of these jets will be inducted to meet the IAF’s training requirements once they receive the required certification. The remaining 36 will be picked up once the HTT-40 fleet — another trainer aircraft that HAL invested ₹550 crore to develop — is operational. Increasing the Indian Navy’s firepower Other than, the primary beneficiary of the DAC’s project approval is BHEL. The government has approved the procurement of an upgraded version of the Super Rapid Gun Mount (SRGM). It is the main fun onboard Navy and Indian Coast Guard warships. According to the government, the upgraded version of the SRGM will increase the capabilities of the warships to manoeuvre against fast-moving targets like missiles. It will also enhance the engagement range of the guns. The Indian Army won’t be left out of the fray. It will be getting new 125 mm Armour Piercing Fin Stabilised Discarding Sabot (APFSDS) ammunition. 70% of the product will be made in India and the ammunition will be brought in under a ‘design and development case’. Other approvals are aimed at speeding up the procurement of Indo-Russian AK 203 guns and push through faster upgrades for UAVs.
