HAL shares fall 8% on report of its exit from India’s stealth fighter jet project

Hindustan Aeronautics shares see profit booking in trade. (Image Source: Reuters)

• HAL shares dropped 8% after exclusion from India's stealth jet project.
• Three private firms shortlisted for AMCA fighter jet programme.
• Defence stocks declined after Budget lacked major policy announcements.

Did our AI summary help?

Shares of Hindustan Aeronautics Ltd (HAL) fell over 8 percent on Wednesday after a report said the state-owned defence major is no longer in the race to develop India’s next-generation stealth fighter jet.

The stock declined 8.34 percent to an intraday low of Rs 4,097.60 on the National Stock Exchange, dragging investor sentiment a day after it had posted strong gains.

According to a report in The Economic Times, three private sector companies have been shortlisted to develop and manufacture next-generation fighter aircraft under the Advanced Multirole Combat Aircraft (AMCA) programme, with the final selection expected within the next three months.

The report, citing sources, said that following the evaluation of technical bids submitted by seven Indian entities, Tata Advanced Systems Ltd, Larsen & Toubro and Bharat Forge have been shortlisted, while the remaining bidders, including Hindustan Aeronautics Ltd, have been ruled out of the process.

HAL shares had risen over 3 percent in the previous trading session but surrendered all those gains on Wednesday following the report.

The stock had also come under pressure earlier this month after brokerages flagged the absence of major policy announcements for the defence sector in the Union Budget, despite an increase in capital expenditure allocation.

Defence stocks witnessed a sharp sell-off after the Budget was presented on February 1, with several frontline and mid-cap stocks declining 5–10 percent in a single session.

Nomura had said the Budget lacked "big bang" measures for the sector, though it viewed the increase in defence capital expenditure as a positive.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.