Along the lines of the ‘Atmanirbharta’ vision of the Union Government, the defence ministry signed two contracts on March 7, Tuesday with Hindustan Aeronautics Ltd. (HAL) and Larsen & Toubro (L&T) Ltd. to indigenously procure training aircraft and ships for a total value of Rs 9,900 crore.
Following the update, the stock of HAL surged by 7% to touch its all-time high of Rs 2,894.30 a piece in the morning’s trading session on Wednesday. This gives a multi-bagger status to the large-cap stock as it has given a 114% return to its shareholders.
Similarly, Larsen and Toubro’s shares also gained marginally following the news. The stock closed at Rs 2,172 on Wednesday, slightly up 1.44% for the day.
Hindustan Aeronautics said in a filing with exchanges, “Ministry of Defence, on March 07, 2023, signed contracts with Hindustan Aeronautics Limited (HAL) and Larsen & Toubro Limited (L&T) for procurement of 70 HTT-40 Basic Trainer Aircraft & three Cadet Training Ships respectively….”
The contract value for HAL is Rs 6,800 crore while for Larsen and Toubro it is Rs 3,100 crore.
The filing further stated, “The Cabinet had also cleared signing of contract with L&T for acquisition of three Cadet Training Ships from L&T, worth more than ₹3,100 crore under Buy {Indian-IDDM (Indigenously Designed, Developed and Manufactured)} category.”
Various important personnel including Defence Minister Shri Rajnath Singh and Defence Secretary Shri Giridhar Aramane were present with the representatives of the two companies and key officials from the Ministry of Defence.
These contracts for training ships and aircrafts are one more step towards self-reliance in the defence production sector for India. This comes after the recent increase in FDI allowance for the sector to 74% from 49% earlier to bolster the ‘Make in India’ initiative.
Written by Vikalp Mishra
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