Defence Stocks: Shares of companies related to the defence sector saw a big jump on Wednesday. Garden Reach Shipbuilders & Engineers (GRSE) led the way, with its shares rising by 14.9% to reach Rs 1,404.50 on the Bombay Stock Exchange (BSE). This happened after the Defence Secretary said that new rules allowing more foreign investment and simpler processes for industrial licenses will help the defence sector grow.
Other defence companies also saw their shares go up. According to News18, Data Patterns rose by 14.4% to Rs 1,631, Bharat Dynamics went up by 9.1% to Rs 1,102.25, and Zen Technologies increased by 10% to Rs 1,068.65. Companies like DCX Systems and Mazagon Dock Shipbuilders also saw their shares rise by double digits during the day.
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The Defence Secretary, Rajesh Kumar Singh, had said on February 17 that the Indian defence industry is about to grow very fast. He explained that easier rules for foreign investment and simpler licensing processes will help the industry grow. He also said that partnerships between the government and private companies will make India a center for advanced manufacturing in defence.
Singh shared that the defence budget, which is currently Rs 6.21 lakh crore, will increase by 9.5% to Rs 6.81 lakh crore in 2025-26. Investors are excited because they think more foreign companies will invest in Indian defence companies. This optimism led to the rise in defence stocks, especially after prices had fallen recently.
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In December, Elara Securities, a financial company, had said that defence stocks like HAL, BDL, Bharat Electronics, and Garden Reach Shipbuilders would do well because they expect more orders for these companies. The defence sector has become very popular among investors in recent years because the government is pushing for India to make its own defence equipment under the Atmanirbhar Bharat (Self-Reliant India) plan.
Earlier, defence stocks had given huge returns, with some going up by 400%, because of rules that limit imports, more foreign investment, and a focus on exporting defence products. However, recently, some investors sold their shares to take profits, which caused prices to drop. Now, the sector is seeing a fresh wave of interest.
