Mumbai (Maharashtra) [India], September 8 (ANI): Shares of defense companies rallied Tuesday after the government on Monday cleared defense acquisition proposals worth about ₹1.10 lakh crore, with 98% of the procurement value earmarked to be sourced from Indian industry.
The development boosted investor sentiment toward the domestic defense sector, as the large procurement approvals are expected to create a strong order pipeline for Indian defense manufacturers.
The Defense Acquisition Council (DAC), chaired by Defense Minister Rajnath Singh, on Monday granted Acceptance of Necessity (AoN), the government’s in-principle approval to move ahead with various defense purchases for the Army, Navy and Air Force.
The positive sentiment was reflected across the defense segment Tuesday, with the Nifty India Defense Index rising 244.15 points, or 2.50%, to close at 9,998.70.
The entire basket of stocks tracked in the index ended Tuesday’s session in the green, with 18 stocks advancing and only one declining, according to NSE data.
Among the major gainers, Mishra Dhatu Nigam (MIDHANI) was the top performer, jumping 12.15% to ₹470.90. The stock gained ₹51 during the session.
Data Patterns shares also witnessed strong buying interest, rising 7.61% to ₹4,940. AxisCades Technologies gained 4.56% to ₹1,859, while Hindustan Aeronautics (HAL) advanced 3.62% to ₹5,031.10. Apollo Micro Systems rose 3.60% to ₹418.50.
The government’s decision to source 98% of the approved procurement value from Indian industry is particularly significant for domestic defense manufacturers.
A higher share of local sourcing means a greater portion of government defense spending could flow toward Indian companies involved in manufacturing defense equipment, components, systems and related technologies.
The latest approvals therefore reinforce the government’s broader push to reduce dependence on defense imports and strengthen domestic manufacturing capabilities.
The strong performance of defense stocks Tuesday also came against a weak broader market. The Nifty 50 fell 144.05 points, or 0.61%, to 23,635.10, while the BSE Sensex declined 555.23 points, or 0.73%, to 75,577.58.
The Nifty India Defense Index has also delivered strong returns over a longer period. According to NSE data in the snapshot, the index was up 29.40% year to date and 32.64% over one year, showing that investor interest in the defense theme has remained strong. (ANI)
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