Singh granted the Acceptance of Necessity for the proposals during a meeting of the Defence Acquisition Council (DAC), India’s top decision-maker for defence procurement.
With the latest clearance, the total approvals in the present fiscal have risen to a record of ₹6.73 lakh crore (excluding the Rafale acceptance of necessity of ₹3.25 lakh crore). This is more than triple the previous year’s figure of ₹2.2 lakh crore.
Key projects
The approved deals are aimed at boosting India’s air defence, logistics, communication systems, among others. Following are the key projects that received the DAC nod and the stocks that could benefit from the same as per Elara Securities:
For Indian Army
- Air Defence Tracked System (Potential Beneficiary: Bharat Electronics)
- High Capacity Radio Relay (Key Beneficiary: Bharat Electronics)
- Runway Independent Aerial Surveillance System (Potential Beneficiaries: Ideaforge, private companies)
For Indian Air Force
- S-400 air defence systems (Potential order size of five units, likely $6-7 billion value; imported from Russia)
- Remotely Piloted Strike Aircraft (Potential beneficiaries: HAL/ other private players)
- Su-30 engine overhaul (Key beneficiary: HAL)
For Indian Coast Guard
- Heavy Duty Air Cushion Vehicles (Hovercrafts) (Potential beneficiaries : Garden Reach Shipbuilders and Engineers Ltd., Goa Shipyard)
The DAC meeting on Friday was the second high-level meeting with India’s top military brass held within three days. Singh had chaired a high-level meeting on March 24 as well to review India’s security and defence preparedness.
The Nifty India Defence index ended the previous session 2.5% lower. Barring Axiscades, Aequs Ltd., MTAR Tech, the remaining 16 stocks in the index ended with losses. While Axiscades ended 5% up, Mishra Dhatu Nigam, Dynamatic Tech, Garden Reach Shipbuilders, Cochin Shipyard, Astra Microwave were the top losers in the index down 4.2%-6.1%.
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