Defence stocks soared on Friday after India’s Defence Acquisition Council (DAC) cleared capital procurement proposals worth ₹1.05 lakh crore ($12.6 billion) exclusively for domestically manufactured Defence equipment. The approvals, granted during a late-Thursday meeting chaired by Defence Minister Rajnath Singh, triggered immediate market gains across the sector.
All 10 approved proposals fall under the “Buy Indian-IDDM” (Indigenously Designed, Developed and Manufactured) category. The acquisitions include armored recovery vehicles, electronic warfare systems, surface-to-air missiles (SAMs), integrated inventory management platforms, novel mines, mine countermeasures, and both major and autonomous naval vessels.
Naval Modernization Prioritized
The Defence Ministry stated on X (formerly Twitter) that these systems would enhance “mobility, air defence, logistics efficiency, and maritime security.” Maritime capabilities received significant focus, with autonomous vessels and mine-countermeasure systems comprising key approvals. This aligns with India’s efforts to strengthen naval readiness in strategic waterways.
Paras Defence and Other Defence Stocks Rallied Sharply
Investors rushed to buy defence stocks on Friday, anticipating significant revenue opportunities from the massive domestic procurement package. The market reaction was immediate and robust, with Paras Defence & Space Technologies leading the surge by climbing 10% to ₹933 per share. Garden Reach Shipbuilders (GRSE) and Zen Technologies both posted gains exceeding 3%, while Cochin Shipyard rose more than 2%.
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Similarly, Mazagon Dock Shipbuilders and Bharat Dynamics (BDL) advanced over 2% each. Commenting on the sweeping approvals, a Mumbai-based analyst noted: “This decision turbocharges the Aatmanirbhar Bharat vision in defence – the IDDM mandate ensures 100% of this ₹1.05 lakh crore will flow directly to domestic manufacturers, securing years of revenue visibility.”
The decision marks a significant step in India’s shift from defence importer to indigenous producer. By requiring all equipment to be designed, developed and manufactured locally, the DAC’s move directly supports the government’s push for self-reliance in critical military technologies. The navy emerges as a major beneficiary, with vessel-related approvals strengthening maritime capabilities.
With the entire procurement valued at ₹1.05 lakh crore allocated to domestic companies, defence stocks are likely to maintain momentum as contractors are selected in coming months. The market’s immediate reaction underscores investor confidence in the sector’s growth prospects under India’s self-reliance initiative.
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