Winning Bizness Desk
Mumbai. Mumbai witnessed a sharp rally in defense-related stocks on Monday, driven by escalating tensions between India and Pakistan following the recent terrorist attack in Pahalgam. Companies such as Paras Defence, Garden Reach Shipbuilders & Engineers (GRSE), Hindustan Aeronautics Limited (HAL), and Bharat Dynamics Limited (BDL) saw their shares rise by up to 10%. Market experts suggest the Indian government could take strong retaliatory actions against Pakistan, boosting the prospects of increased defense equipment purchases, including missiles, drones, and naval systems.
HAL, BDL, and Cochin Shipyard See Significant Gains
Among the top performers, Paras Defence led with a 10% surge, followed by GRSE which gained 8.11%. HAL’s shares closed with a 5.57% rise, while BDL posted a 5.42% increase. Cochin Shipyard shares climbed 6.10% after the successful testing of the Indian Navy’s anti-ship missile. Meanwhile, Mazagon Dock also saw a 4.77% uptick. The overall sentiment in defense stocks remained highly positive amid growing speculation of defense budget expansions.
India Signs Rafale Marine Deal with France
In a significant development, India signed a deal with France on April 28 to acquire 26 Rafale Marine fighter jets. Defense ministers from both countries inked the agreement, which includes 22 single-seater and 4 double-seater aircraft equipped with nuclear strike capabilities. Reports suggest the deal is valued at around ₹63,000 crore, making it the largest arms procurement deal between India and France to date.
Approval Linked to Security Concerns Post Pahalgam Attack
The Cabinet Committee on Security (CCS), chaired by Prime Minister Narendra Modi, had approved the Rafale Marine deal on April 23, following the Pahalgam terrorist attack. The CCS meeting was specially convened after 26 tourists were killed in the assault. In response to the attack, India also suspended the Indus Waters Treaty, prompting Pakistan to announce the suspension of nearly all bilateral agreements and declare that any Indian obstruction of river waters would be seen as an "act of war."
High-Level Meetings on National Security
Prime Minister Modi and Defense Minister Rajnath Singh held an important 40-minute meeting on Monday to discuss the situation. Singh briefed Modi extensively on the Pahalgam attack. Later in the day, a meeting of the Parliamentary Committee on Defense was scheduled to further deliberate on India's response to Pakistan, signaling that major strategic decisions could be forthcoming.
Key Takeaways:
- Defense stocks surged up to 10% amid heightened Indo-Pak tensions.
- Paras Defence shares jumped the most, followed by GRSE, HAL, and BDL.
- India signed a ₹63,000 crore deal with France for 26 Rafale Marine jets.
- The Rafale aircraft will have nuclear strike capabilities.
- The CCS cleared the deal after the Pahalgam terror attack killed 26 tourists.
- India suspended the Indus Waters Treaty in response to the attack.
- High-level meetings are underway to finalize critical decisions against Pakistan.
