How Did Defence Stocks Rally Over 9% with India's Rs 63,000 Crore Rafale Deal?
Click to start listening
Synopsis
In an impressive turn of events, defence stocks surged over 9% after India’s monumental deal to procure 26 Rafale Marine fighter jets from France. This purchase not only boosts India's naval capabilities but also reflects a significant investment in national security. Explore how this deal impacts the market and the strategic landscape of the Indian Navy.
Key Takeaways
- Defence stocks surged over 9% following the Rafale deal.
- Paras Defence led the rise with a 9.27% increase.
- The deal includes 26 Rafale Marine fighter jets for the Indian Navy.
- Delivery of jets expected by 2030-31.
- Indigenous manufacturing is part of the procurement strategy.
New Delhi, April 28 (NationPress) Defence stocks experienced a remarkable surge on Monday, increasing by over 9 percent following the government's agreement with France to acquire 26 Rafale Marine fighter jets for the Indian Navy worth Rs 63,000 crore.
The Nifty Defence index saw an impressive rise of 4.5 percent, marking its most significant intra-day gain since April 15.
Seventeen of the index's 18 constituents reported gains, with notable performances from companies such as Paras Defence and Space Technologies, Garden Reach Shipbuilders and Engineers, and Data Patterns (India).
Paras Defence spearheaded the rally, closing the intra-day session at Rs 1,142 on the National Stock Exchange (NSE), which represented a substantial increase of 9.27 percent.
Moreover, the company announced in a filing on Friday that its board will convene on April 30 to deliberate on a possible stock split, approve the audited financial results for FY25, and recommend a dividend, further enhancing investor enthusiasm.
Garden Reach Shipbuilders, another key player in the defence sector, saw its stock climb by 8.11 percent on the NSE.
Other significant stocks like Hindustan Aeronautics Limited (HAL) experienced an uptick of over 5.5 percent, while Mazagon Dock Shipbuilders and Cochin Shipyard increased by 4.77 percent and 6.1 percent, respectively.
Bharat Electronics Limited (BEL) also noted a substantial rise, climbing over 3.28 percent during the trading session.
The delivery of the 26 Rafale Marine jets, produced by Dassault Aviation of France, is anticipated to occur within 37 to 65 months, with all deliveries expected to be completed by the fiscal year 2030-31.
This procurement will encompass weapons, simulators, spares, and auxiliary equipment, along with crew training and logistics support for the Indian Navy from the French government. It also includes the indigenous manufacture of components in line with the 'Atmanirbhar Bharat' initiative.
The fighter jets will be deployed on the aircraft carriers INS Vikrant and INS Vikramaditya, significantly augmenting the Indian Navy's ability to address any potential threats in the Indian Ocean.
The French maritime fighter jet is a robust aircraft, designed to endure the challenging conditions associated with aircraft carrier operations in a corrosive environment.
Point of View
It is crucial to recognize the significance of the recent Rafale deal for India's defence sector. This agreement not only signifies a major boost for the Indian Navy but also showcases the government's commitment to enhancing national security through strategic international partnerships. The surge in defence stocks reflects investor confidence in a strengthened military capability, aligning with the broader vision of an 'Atmanirbhar Bharat'.
NationPress
01/05/2025
Frequently Asked Questions
What is the value of the Rafale deal signed by India?
The Rafale deal signed by India is valued at Rs 63,000 crore.
How many Rafale Marine fighter jets will India purchase?
India will purchase 26 Rafale Marine fighter jets from France.
Which companies saw significant gains after the Rafale deal?
Notable companies that experienced significant gains include Paras Defence, Garden Reach Shipbuilders, and Hindustan Aeronautics Limited.
When are the Rafale jets expected to be delivered?
The Rafale jets are expected to be delivered within 37 to 65 months, with completion aimed by 2030-31.
What initiatives are included in the Rafale procurement?
The Rafale procurement includes indigenous manufacturing of components under the 'Atmanirbhar Bharat' initiative.
