- 07 Jun 2022
- ICICIdirect Research
GOVERNMENT APPROVES INDIGENOUS PROCUREMENT OF DEFENCE ITEMS WORTH RS 76,390 CRORE
News: The Defence Acquisition Council (DAC) has approved the procurement of military equipment/platforms worth | 76,390 crore from domestic companies. These include Next Generation Corvettes (NGC) for Indian Navy at a cost of ~| 36,000 crore, manufacture of Dornier Aircrafts & Su-30 MKI aero-engines by Hindustan Aeronautics (HAL) for IAF. DAC has also approved procurement of Rough Terrain Fork Lift Trucks (RTFLTs), bridge laying tanks (BLTs), wheeled armoured fighting vehicles (WAFVs) with anti-tank guided Missiles (ATGMs) and Weapon Locating Radars (WLRs) for the Indian Army
Views: Indigenous procurement of defence equipment/platforms entails a huge opportunity for domestic companies including defence PSUs and private players. The order inflows for these items are expected in the next year or two as DAC has only accorded acceptance of necessity (AoN). We believe that local manufacturing of Dornier Aircraft and Su-30 MKI engines will translate into large orders for HAL. Domestic procurement of Next Generation Corvettes may also drive orders for defence shipyard PSUs like Cochin Shipyard, Garden Reach & Mazagin Dock. We believe Bharat Electronics and Bharat Dynamics will also benefit from the procurement of other mentioned equipment
Impact: Positive