📷 Image Credits: Moneycontrol
Shares of defence companies in India witnessed a significant surge of up to 13 percent on July 5th following an announcement by Defence Minister Rajnath Singh regarding the highest ever growth in the country’s defence production for the fiscal year 2023-24. The value of production has soared to Rs 1,26,887 crore, marking a substantial 16.8 percent increase compared to the previous financial year. Prime Minister Narendra Modi also lauded this achievement, emphasizing the government’s commitment to establish India as a leading global defence manufacturing hub.
Singh expressed the government’s dedication to nurturing an environment conducive to the development of India as a key player in global defence manufacturing. This milestone aligns with the ambitious target set by Singh during his second tenure as Defence Minister to export over Rs 50,000 crore worth of defence equipment by 2028-2029.
The positive market sentiment was reflected in the trading behavior of defence companies like Bharat Dynamics, Bharat Electronics, Hindustan Aeronautics, Cochin Shipyard, and Data Patterns, which experienced an upsurge in their share prices. Moreover, the Motilal Oswal Nifty India Defence Index Fund also witnessed robust subscription numbers, raising Rs 1,676 crore during its New Fund Offer (NFO) period, setting a record for the highest collection by an equity index fund during an NFO period.
Amidst the bullish outlook on the sector, the Nifty India Defence Index showcased remarkable performance over the past one and three years, achieving impressive compounded annual growth rates of 177 percent and 89.5 percent, respectively, as of May-end. The surge in defence stocks reflects the market’s optimism towards India’s defence sector and the government’s strategic initiatives to strengthen the nation’s security apparatus and propel India as a self-reliant entity in defence manufacturing.