Defence stocks, including those of Hindustan Aeronautics, Bharat Dynamics, and Bharat Electronics, have seen a significant uptick following the Cabinet Committee on Security’s (CCS) approval of defence deals worth ₹80,000 crore.

What Happened:  The CCS, headed by Prime Minister Narendra Modi, gave the nod to two major defence deals on October 10. The first deal involves the acquisition of 31 Predator drones from the USA, which will significantly enhance the country’s surveillance capabilities.

The second deal, valued at approximately ₹45,000 crore, is for the production of two nuclear-powered attack submarines at the Ship Building Centre in Vishakhapatnam.

Larsen and Toubro (L&T) are anticipated to play a significant role in the construction of the two new nuclear submarines. The procurement of the ‘hunter-killer’ drones from US defence giant General Atomics is projected to cost around $ 3.1 billion.

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The deals, which needed to be approved before October 31 due to the expiration of the American proposal, are expected to be signed in the upcoming days. The proposed mega drone deal was first announced during Prime Minister Narendra Modi’s state visit in June 2023.

These defence purchases are intended to bolster the surveillance capabilities of the armed forces, particularly along the Line of Actual Control (LAC) with China. The Sea Guardian drones, procured for the three services, are capable of performing a variety of roles, including maritime surveillance, anti-submarine warfare, and over-the-horizon targeting, among others. 

Price Action: Shares of Hindustan Aeronautics rose 3.18% to ₹4,525.95.

Shares of Mazagon Dock Shipbuilders rallied 9.72% to ₹4,484.25.

Shares of Bharat Dynamics gained 4.42% to ₹1,214.50. 

Shares of Bharat Electronics rose 2.48% to ₹289.40.

Shares of Cochin Shipyard surged 3.34% to ₹1,710.

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