Defence stocks rally up to 13% after government approves list of 780 items to be procured from domestic industry – Details

Union Defence Minister Rajnath Singh on Sunday approved the third positive indigenous list of 780 components and subsystems to be procured from the domestic industry.

The government decided to procure these defense equipment from domestic players is under Atmanirbhar Bharat Abhiyan: PTI

Defence companies’ shares surged up to 13 per cent on the BSE intraday during Monday’s trading session as the government approved the fresh list of 780 components and subsystems which will only be procured from domestic industry, to give push for Atmanirbhar Bharat Abhiyan.

Union Defence Minister Rajnath Singh on Sunday approved the third positive indigenous list of 780 components and subsystems to be procured from the domestic industry after a ban on their import kicks in under a staggered time-line of around six years.

Individually, Mazagaon Dock Shipbuilders shares gained most by around 13 per cent and touched a new 52-week high of Rs 399 per share, followed by Paras Defence and Space Technologies and Garden Reach Shipbuilders shares each up by over 7 per cent to Rs 688 and 309.3 apiece, respectively, on the BSE.

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Similarly, Cochin Shipyard shares also spurted around 6.5 per cent and also hit a new 52-week high of Rs 387.9 per share along with Bharat Electronics Limited shares which also touched its 52-week high, after gaining almost 2 per cent on the BSE intraday today.

Shares of Astra Microwave and Mishra Dhatu Nigam gained around 5 and 3.5 per cent to Rs 374 and 196.5 per share, respectively. Bharat Dynamics and Hindustan Aeronautics Limited shares gained almost 2 per cent each on the BSE intraday today.

It is the third such ‘positive indigenisation’ list comprising line replacement units, sub-systems and components used for various military platforms, equipment and weapons, and the aim is to minimise imports by the defence public sector undertakings (DPSUs), the ministry’s statement said.

The defence ministry has set specific timelines for import ban of the items, spanning a period from December 2023 to December 2028.

Amid rising demand for indigenisation, the defence sector outlook is seen as positive, domestic brokerage house ICICI Securities noted in its report while citing the triggers around the sector. The brokerage sees an upside of around 39 per cent in the defence sector stocks from current levels.

Among favourite picks, the brokerage picks Hindustan Aeronautics, Mishra Dhatu Nigam, Mazagaon Dock and Astra Microwave.

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