HAL shares gain 2% as Ministry of Defence signs ₹62,370 crore contract with defence PSU; key details to know

The stock was in demand amid Ministry of Defence (MoD) signing a contract with HAL for the procurement of 97 Light Combat Aircraft (LCA) Mk1A, including 68 fighters and 29 twin seaters, along with associated equipment, for the Indian Air Force, at a cost of over ₹62,370 crore (excluding taxes), on September 25, 2025.

The delivery of these aircraft would commence during 2027-28 and be completed over a period of six years.

The aircraft will have an indigenous content of over 64%, with 67 additional items incorporated, over and above the previous LCA Mk1A contract signed in January 2021.

The integration of advanced indigenously developed systems such as the UTTAM Active Electronically Scanned Array (AESA) Radar, Swayam Raksha Kavach, and control surface actuators will further strengthen the Aatmanirbharta initiatives, said a press release by the Ministry of Defence.

The project is being supported by a robust vendor base of nearly 105 Indian companies directly engaged in the manufacture of detailed components. The production is expected to generate close to 11,750 direct and indirect jobs per year for the duration of six years, giving a major boost to the domestic aerospace ecosystem, the press release added.

The press release further said that the acquisition, under the ‘Buy (India-IDDM)’ category of Defence Acquisition Procedure 2020, is in line with the government’s thrust on indigenisation.

"The LCA Mk1A is the most advanced variant of the indigenously designed & manufactured fighter aircraft and will serve as a potent platform to meet the operational requirements of the IAF," it added.

About Hindustan Aeronautics

Hindustan Aeronautics Limited (HAL) is a state-owned aerospace and defence company based in Bengaluru. It is a public sector undertaking operating under the Ministry of Defence.

Hindustan Aircraft Limited was founded by Walchand Hirachand in December 1940. The government acquired a one-third stake in HAL in 1941. The HT-2 Trainer aircraft, manufactured by HAL, took its first flight in August 1951. The government established Aeronautics India Limited (AIL) in August 1963 to start the production of MiG-21 aircraft. In October 1964, Hindustan Aircraft Limited merged with Aeronautics India Limited, leading to the formation of HAL as it is known today.

HAL was listed on BSE and National Stock Exchange (NSE) on March 28, 2018.