BEL, HAL, Bharat Dynamics: Why Are Defence Stocks Flying Today?

Defence stocks rallied up to 5.6% on Friday, March 21, 2025, following the Centre’s approval of faster defence procurement guidelines and preliminary clearances for military acquisitions worth over Rs 54,000 crore. 

As of 11:40 AM, shares of Astra Microwave Products rose 3.16%, Hindustan Aeronautics (HAL) gained 3.15%, MTAR Technologies advanced 2.89%, Bharat Dynamics added 2.51%, BEML increased 2.34%, Paras Defence and Space Technologies climbed 1.97%, Data Patterns (India) rose 1.78%, and Bharat Electronics edged up 0.37%.

Major Defence Approvals

On March 20, 2025, the Defence Acquisition Council (DAC), led by Defence Minister Rajnath Singh, granted Acceptance of Necessity (AoN) for eight capital acquisition proposals. This includes a 1350 HP engine upgrade for the Indian Army’s T-90 tanks, enhancing their battlefield mobility, especially in high-altitude regions.

"Under the chairmanship of Raksha Mantri Shri Rajnath Singh, the Defence Acquisition Council (DAC), on March 20, 2025, accorded Acceptance of Necessity (AoNs) to eight capital acquisition proposals amounting to over Rs 54,000 crore" as per the release.

Boost for Navy & Air Force

The Indian Navy received AoN approval for Varunastra Torpedoes, an indigenously developed anti-submarine weapon that strengthens underwater defence. Meanwhile, the Indian Air Force secured approval for Airborne Early Warning & Control (AEW&C) Aircraft Systems, critical for modern warfare by significantly enhancing combat potential.

Faster Procurement Process

As part of the Ministry of Defence’s ‘Year of Reforms’ initiative in 2025, the DAC also introduced streamlined guidelines to accelerate defence acquisitions, ensuring a more efficient and effective procurement process.