Defence stocks gain as DAC approves acquisition of equipment worth Rs 84,560 crore

In the February 1 Interim Budget, the budgetary allocation for FY 2024-25 was Rs 1.72 lakh crore, around 20.33 percent higher than the actual expenditure of FY 22-23.

Defence stocks gained after the Defence Acquisition Council (DAC) approved capital acquisition proposals worth Rs 84,560 crore to "boost the capabilities of the Armed Forces & Indian Coast Guard." DAC  makes decisions on new policies and capital acquisitions.

At 9:30 am on February 19, stock of  Bharat Electronics at Rs 192.30 (2.12 percent) and Bharat Dynamics was trading at Rs 1,742.95 (1.93 percent). While HAL stock opened in the green, by 9:50 am it was trading at Rs 3,064.10 ( 0.4 percent lower)

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The equipment to be acquired include new generation anti-tank mines, Air Defence Tactical Control Radar, Heavy Weight Torpedoes, Medium Range Maritime Reconnaissance and Multi-Mission Maritime Aircraft, Flight Refueller Aircraft and  Software Defined Radios, said Ministry of Defence on Friday.

The ministry added, "With the aim to create a friendly defence start-up ecosystem and promote procurement of Advanced technologies from start-ups and MSMEs developed under the Innovations for Defence Excellence (iDEX) and Technology Development Fund schemes, the DAC has approved amendments in the Defence Acquisition Procedure (DAP) 2020."

Also read: Budget 2024 Highlights: Defence Ministry gets Budget boost, govt spending on DRDO sees upward revision too

On February 16, sources told CNBC-TV18 that the defence equipment order is likely to be issued to players such as BEL and HAL.

In the February 1 Interim Budget, the budgetary allocation for defence for FY 2024-25 was Rs 1.72 lakh crore, around 20.33 percent higher than the actual expenditure of FY 22-23. Of this, according to a release, "a major share of 27.67 percent is for capital, 14.82 percent is for revenue expenditure on sustenance and operational preparedness, 30.68 percent is for Pay and allowances, 22.72 percent is for defence pensions and 4.11 percent for civil organisations under the Ministry of Defence".