Shares of defence public sector undertakings (PSUs) and Indian shipyards jumped on Friday after India's Ministry of Defence (MoD) signed contracts worth ₹37,600 crore with various state-run companies.

The stock of Bharat Electronics Ltd rose 7% in intraday trade to ₹98.45 on the National Stock Exchange (NSE) as the defence ministry inked two contracts worth ₹2,696 crore to bolster defence capabilities. The ministry will procure 13 Lynx U2 Fire Control Systems for the Indian Navy at a total cost of ₹1,705 crore. BEL will also produce Weapon Locating Radar (Swathi) for the Indian Army in a deal worth ₹991 crore.

Shares of Bharat Dynamics surged as much as 5% to ₹1,006 apiece on the NSE after the ministry signed contracts for procurement of improved Akash Weapon System (AWS) with Bharat Dynamics Ltd for ₹8,160 crore. The AWS is a short range surface to air missile air defence system, indigenously designed and developed by Defence Research and Development Organisation (DRDO).

"The project will give a boost to the Indian missile manufacturing industry in particular and the indigenous defence manufacturing ecosystem as a whole. The project has overall indigenous content of 82% which will be increased to 93% by 2026-27," the ministry says in a statement. Around 60% of the project cost will be awarded to the private industry, including MSMEs, in maintaining the supply chain of the weapon system. "This project will play a role in boosting the overall economy by avoiding outgo of precious foreign exchange to other countries, increasing employment avenues in India and encouraging Indian MSMEs through components manufacturing," the ministry adds.

MoD inks ₹19,600 crore worth contracts with Indian shipyards

In a big boost to self-reliance, the Ministry of Defence has signed contracts with Indian shipyards for acquisition of 11 next generation offshore patrol vessels and six next generation missile vessels at an overall cost of ₹19,600 crore.

The contract for acquisition of 11 next generation offshore patrol vessels was signed with Goa Shipyard Ltd (GSL) and Garden Reach Shipbuilders and Engineers (GRSE) at a total cost of ₹9,781 crore. Of the 11 ships, seven will be indigenously designed, developed and manufactured by GSL and four by GRSE. The delivery of the ships is scheduled to commence from September 2026. The construction of these ships is expected to generate an employment opportunity of 110 lakh man-days over a period of seven and half years. The stock of Garden Reach Shipbuilders surged around 7% in opening trade to ₹474 apiece on the NSE.

The ministry also signed a contract to acquire six next generation missile vessels with Cochin Shipyard Ltd for ₹9,805 crore. The delivery of ships is scheduled to commence from March 2027. Reacting to the development, shares of Cochin Shipyard rose as much as 5% in intraday trade to ₹496.70 apiece on the NSE.

The government has also inked a contract with BrahMos Aerospace Private Ltd for procurement of next generation maritime mobile coastal batteries and BrahMos missiles at a cost of ₹1,700 crore.

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