Bharat Dynamics to Mazagon Dock: These defence stocks in green after DAC approves ₹1.45 lakh crore procurements

The government has approved ten proposals worth ₹1.45 lakh crore to purchase defence equipment from local manufacturers for the Armed Forces.

The Defence Acquisition Council (DAC), headed by Defence Minister Rajnath Singh, approved the Acceptance of Necessity (AoN) for 10 capital acquisition proposals worth ₹1,44,716 crore for the Armed Forces in its meeting on Tuesday.

The DAC is the highest authority for approving key acquisition proposals for the Armed Forces.

Defence stocks rise

After the DAC's decision, shipbuilding stocks rose on Wednesday, September 4. In the early trade, shares of Mazagon Dock Shipbuilders (MDL) were trading 1.7% higher at ₹4,533.3 per share on the National Stock Exchange.

The Garden Reach Shipbuilders & Engineers (GRSE) stock also gained 1.6% to ₹1,944. Similarly, shares of Cochin Shipyard were trading 1.8% higher at ₹1,915.

These stocks had gained up to 7% on Tuesday before the DAC meeting.

Defence equipment manufacturer Bharat Dynamics' shares were also up 0.8% to ₹1,331.7 apiece. Hindustan Aeronautics Limited (HAL) scrip rose by 0.2% to reach ₹4,841.9.

The proposals approved include procuring Future Ready Combat Vehicles (FRCVs) to modernise the Indian Army's tank fleet.

According to a release by the Defence Ministry, these vehicles will be Main Battle Tanks with superior mobility, all-terrain ability, multilayered protections, precision and lethal firepower, and real-time situational awareness.

The DAC also approved the proposal to procure Air Defence Fire Control Radars to detect and track aerial targets and provide firing solutions.

The Acceptance of Necessity (AoN) has also been cleared for a Forward Repair Team (Tracked) with suitable cross-country mobility for in-situ repair during mechanised operations.

Armoured Vehicles Nigam Limited has designed & developed the equipment which is authorised for both mechanised Infantry Battalion and Armoured Regiment.

The DAC accorded three AoNs to enhance the capabilities of the Indian Coast Guard (ICG).

Under the proposal, Dornier-228 aircraft, Next-Generation Fast Patrol Vessels with high operational features in rough weather conditions, and Next-Generation Offshore Patrol Vessels with advanced technology and enhanced long-range operations will be procured.

The ministry stated that the equipment will improve ICG's capability to carry out surveillance, patrolling of maritime zones, search and rescue, and disaster relief operations.

The government has approved a total budget of ₹6,21,941 crore for the Ministry of Defence for FY 2024-25.

Of this, ₹1.72 lakh crore has been allocated for capital acquisition and ₹92,088 crore for sustenance and operational readiness to strengthen the Armed Forces further and provide impetus to 'Aatmanibharta' in the defence sector.