Shares of Hindustan Aeronautics (HAL) surged 14 per cent to Rs 1,047 on the BSE in Thursday's early morning trade after the government approved procurement of 83 indigenously-developed light combat aircraft 'Tejas' for the Indian Air Force at a cost of Rs 48,000 crore.
“(The Cabinet) has approved the procurement of 73 LCA Tejas Mark 1A fighter aircraft and 10 LCA Tejas Mark 1 trainer aircraft at a cost of Rs 45,696 crore, along with design and development of infrastructure sanctions worth Rs 1,202 crore,” the ministry of defence (MoD) said. READ HERE
HAL will act as the lead integrator for building the aircraft at a targeted rate of 16 fighters per year. The first aircraft will be delivered three years after HAL and the IAF sign a contract.
Around three years back, the Indian Air Force had issued an initial tender for procurement of 83 Tejas aircraft, a four-and-half generation combat jet which is manufactured by State-run aerospace behemoth HAL.
HAL is promoted and majorly owned by the government. HAL plays a strategic role in India’s defence programme being the only Indian company having specialization in aircraft manufacturing and providing its Maintenance, Repair and Overhauling services (ROH).
“There is a strong push from the government through the ‘Atmanirbhar Bharat Abhiyan’, the policy formulations and reforms post-Covid which is giving significant impetus to self-reliance and local production. This is expected to favourably impact the operations of the company. The defence services are looking for more indigenous options as compared to import and the company is expected to greatly benefit from this as there is a slew of indigenous products like LCA Tejas and its variants LCH, LUH, HTT-40, etc,” HAL said in its 2019-20 annual report.
At 10:31 am, the stock was trading 11 per cent higher at Rs 1,018 on the BSE, against a 0.21 per cent decline in the S&P BSE Sensex. The trading volumes on the counter jumped over five-fold with a combined 4.33 million equity shares having changed hands on the NSE and BSE, so far.