HAL shares jump 5% on ₹26,000 cr order from IAF

Shares of Hindustan Aeronautics Limited (HAL) rose 5% on Tuesday after the Cabinet Committee on Security approved the proposal for procurement of 240 aero-engines for Su-30 MKI aircraft of the Indian Air Force (IAF) under buy Indian category from HAL at a cost of over ₹26,000 crore.

The stock opened at ₹4,925 against its previous closing price of ₹4,686.10. Shares of the defence public sector undertaking hit an intraday high of ₹4,925 on the BSE.

The delivery of these aero-engines would start after one year and complete over a period of eight years. The engines will have indigenous content over 54%, enhanced due to indigenisation of some key components of aero-engines. These would be manufactured at the Koraput division of HAL.

“Su-30 MKI is one of the most powerful and strategically-significant fleet of IAF. The supply of these aero-engines by HAL would meet the fleet sustenance requirement of IAF to continue their unhindered operations and strengthen the defence preparedness of the country,” the ministry of defence says.

In a bid to minimise imports and achieve self-reliance in the defence sector, the ministry in July released fifth positive indigenisation list (PIL) consisting of 346 items, which will be procured from domestic manufacturers. With the release of the new list, India expects to procure a total of 5,012 items indigenously in the coming years.

The defence public sector undertakings involved in the fifth positive indigenisation list include Hindustan Aeronautics (HAL), Bharat Electronics (BEL), Bharat Dynamics (BDL), BEML, India Optel (IOL), Mazagon Dock Shipbuilders (MDL), Goa Shipyard (GSL), Garden Reach Shipbuilders & Engineers (GRSE) and Hindustan Shipyard (HSL).

With this initiative, the ministry aims to bolster indigenous capabilities, save foreign exchange, reduce dependency on foreign manufacturers, boost economic growth, increase defence investment, and enhance domestic defence design through academic and research collaboration.

In a separate development, the Cabinet Committee on Economic Affairs (CCEA) has approved a new railway line project under the Ministry of Railways with a total cost of ₹18,036 crore. The proposed new line between Indore and Manmad will provide direct connectivity and improve mobility, providing enhanced efficiency and service reliability for Indian Railways.

The project is a result of PM-Gati Shakti National Master Plan for multi-modal connectivity which aims to provide seamless connectivity for movement of people, goods and services. The project covers six districts in two states i.e., Maharashtra and Madhya Pradesh will increase the existing network of Indian Railways by about 309 Kms.

The project is expected to provide direct connectivity to Pithampur Auto Cluster (houses 90 large units and 700 small and medium industries) from gateway port of JNPA and other state ports. Project will also provide direct connectivity to millet producing districts of Madhya Pradesh and Onion producing districts of Maharashtra which further facilitates in the distribution of the same to northern and southern parts of the country.