Rafale-maker Dassault Aviation shares hover near record-high territory amid Indo-Pak hostility

Share price of Dassault Aviation, the French manufacturer of Rafale jets, neared record high levels on Wednesday, rising for the second consecutive trading session. At 3:55 PM IST, the stock of Dassault Aviation was trading at €302.40 on the Paris Stock Exchange, 0.47% higher, coming close to its record-high levels of €332.20. The scrip has rebounded from Monday’s low of €292.

The stock has been in focus ever since India launched Operation Sindoor, a precision airstrike to destroy terrorist camps 200 kilometres within Pakistani territory and Pakistan-occupied Kashmir, but without breaching Pakistani airspace. Multiple reports have suggested that the Indian Air Force had deployed Rafale jets, armed with SCALP cruise missiles and HAMMER munitions, to carry out precision airstrikes.

On Monday, Dassault Aviation stock erased the gains it made in the aftermath of Operation Sindoor—and the military confrontations that ensued—after the two countries mutually agreed upon an immediate ceasefire. However, the stock rebounded after Prime Minister Narendra Modi made an unexpected visit to the Adampur Air Force Base, and with a S-400 missile defence system in the backdrop, lauded the Indian armed forces for “humbling” Pakistan in the four-day military confrontation. 

“India's Lakshman Rekha against terrorism is now crystal clear. India will respond and definitely respond if hit by a terror attack,” said Modi. The Adampur Air Force Base is merely 100 kilometres from the border with Pakistan. The Indian Air Force currently has 36 Rafale fighter jets.

In April, India signed a deal with France to buy 26 Rafale jets for its navy in a deal worth ₹6,300 crore ($7.4 billion). “The delivery of these aircraft would be completed by 2030, with the crew undergoing training in France and India,” the defence ministry had said in a statement announcing the deal. 

According to the terms of the deal, Dassault will supply 22 single-seater and four twin-seater fighter jets for its navy, which currently consists largely of Russia’s MiG-29 jets. Industry experts touted the deal as a step towards reducing reliance on Russian-manufactured defence equipment and modernising its military. In the 1980s, India had purchased Mirage 2000 jets.