Top defence stocks in India: The growing concerns about national security are only anticipated to fuel the growth trajectory of India’s military industry, which is a substantial component of the nation’s economy. India has the second-largest army in the world, providing it with a formidable defense force to safeguard its people and borders. And it seems reasonable to make sure it’s leveraged as much as possible.
India’s defense business is very large and includes many different areas, such as naval, land, and space systems. There are a lot of public and private defense companies that help make military supplies and equipment.
In the past few years, the defense industry has gone through a huge change. It used to buy a lot of things but now it exports them. India spent the fourth most on defense in the world in 2022. In the fiscal year 2023–24, defense exports rose by 32.5% and reached a new high of Rs21,083 crore, which is about $2.63 billion. These exports are a big jump from the Rs15,920 crore they were the previous year.
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The Indian defence sector has experienced rapid economic expansion in addition to rising demand, government efforts, and innovation. Indian defense stocks have experienced an incredible Dalal Street bull run over the last 12 months. As of April 26, 2024, the Nifty India Defense index had risen an amazing 142% in the previous year, according to corporate database ACE Equity statistics.
Top defence stocks in India
Here are the top defense stocks in India according to market capitalization as of June 28, 2024, using data from NSE India and BSE India.
| Company | Market cap (in Rs) |
|---|---|
| Hindustan Aeronautics Limited | 3,52,614.96 |
| Bharat Electronics Limited | 2,22,802.06 |
| Solar Industries India | 90,585.07 |
| Bharat Dynamics Limited | 58,503.38 |
| Cochin Shipyard Limited | 58,035.62 |
| Garden Reach Shipbuilders & Engineers Ltd | 23,975.73 |
| BEML Ltd | 18,622.17 |
| Zen Technologies | 16,887.98 |
| Data Patterns | 16,800.79 |
| Astra Microwave Products | 9,026.42 |
| Mishra Dhatu Nigam Limited | 8,626.07 |
| MTAR Technologies Limited | 5,706.21 |
| Paras Defence and Space Technologies Ltd | 5,499.98 |
| DCX Systems Limited | 4,029.40 |
| Ideaforge Technology Limited | 3,363.65 |
| Apollo Micro Systems Limited | 3,193.07 |
| Nibe Ltd | 2,572.27 |
| Rossell India limited | 2,146.63 |
| Taneja Aerospace & Aviation Ltd | 1,573.38 |
| CFF Fluid Control Ltd | 1,567.67 |
| Krishna Defence & Allied Industries Ltd | 1,501.52 |
| Sika Interplant Systems Ltd | 1,373.82 |
Innovations that are revolutionizing the Indian defense sector
India’s defense industry has changed a lot thanks to changes in institutions and policies that encourage manufacturing in India, buying goods made in India, and exporting. The “Aatmanirbhar Bharat” plan prioritizes the defense and aerospace industries, focusing on R&D and manufacturing in the country.
In the Union Budget for 2023–24, capital spending for modernizing the Defense was raised to Rs1,62,600 crore, which is 6.7% more than in FY 2022–2023. The business made Rs 5.94 lakh crore, which is 13% more than the previous year.
The Indian Army has said that 2024 will be the Year of Technology Absorption. This is a big change in how they plan to modernize. The goal is to improve operational skills by combining secure networks, counter-drone devices, and drones. The Army puts a high value on indigenization and works to improve AI, software, and robotic aerial platforms on the home front.
The Army is also putting money into cutting edge technology like protection measures, AI-powered tools, and native 5G solutions. They are doing this in collaboration with the Ministry of Electronics and Information Technology (MeitY). It’s worth mentioning that in November 2023, the Swedish defense company SAAB announced the first 100% foreign direct investment (FDI) deal to make the Carl Gustav M4 rocket system.
Major progress has been made in the construction of naval bases. In September 2022, Prime Minister Narendra Modi unveiled a sizable warship by the name of INS Vikrant. It talks about how the government supports industry in the country that hires MSMEs and SMEs.
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Project 17A frigates, like the INS Vindhyagiri, which was launched in August 2023, stress a balanced mix of cutting-edge technologies and weapons. This is in line with India’s evolving defense policies. This project is an example of a balanced method because it focuses on advanced radar, sensor, and electronic technology along with tanks, missiles, long-range artillery guns, and multibarrel rocket launchers.
India’s new defense companies are growing.
The goals of the “Make in India” and “Atmanirbhar Bharat” programs are to reduce dependence on imports and encourage the production of defense-related goods and technologies in India.
India has more than 329 defense technology companies, and all of them work on making the country’s defense stronger by using cutting-edge technologies. Under the India-United States Defense Acceleration Ecosystem (INDUS-X), Indian and American companies will work together to co-develop and co-produce cutting-edge technology, especially in space and AI.
In the Union Budget 2022–2023, 25% of the money for military research and development is given to startups and the private sector. This is meant to encourage India to come up with new defense technologies.
Government funding and initiatives
The Indian government has put in place many funding programs and initiatives to help and develop new businesses in many industries, including the country’s defense sector.
The Technology Development Fund (TDF) scheme
The Ministry of Defence’s main ‘Make in India’ initiative, the Technology Development Fund (TDF), aims to give Indian industries—including MSMEs and startups—grant funding for developing defense and dual-use technology. Funding support up to Rs. 10 crore, industry-academia collaboration, a two-year project duration, and eligibility for companies and individual innovators are among the key aspects. Collaborations with academic institutions and DPIIT recognition are welcomed.
Top 10 Defence Stocks in India Ranked by Order Book Value
Innovations for Defence Excellence (iDEX)
The Ministry of Defence’s flagship programme, iDEX, encourages self-reliance, entrepreneurship, and innovation in the defence industry. It is in line with the “Atmanirbhar Bharat Abhiyan,” which the Prime Minister introduced at DefExpo 2018. Through the Defence Innovation Organization (DIO), the program offers financial support to 300 companies, MSMEs, individual innovators, and 20 partner incubators.
Development of Innovative Technologies with iDEX (ADITI) scheme
The Department of Defence Production, Ministry of Defence, uses the iDEX architecture to run the 750 crore rupee ADITI scheme from 2023–2025. In addition to developing a “Technology Watch Tool” to help the Armed Forces’ needs be in line with the defense innovation ecosystem, it seeks to produce thirty vital deep-tech strategic technologies. There are seventeen challenges in all from the Indian Army, Navy, Air Force, and Space Agency in this first edition of ADITI.
Defence India Startup Challenges (DISC)
The Defence India Startup Challenge is an extension of the iDEX project that intends to assist startups, MSMEs, and innovators in developing prototypes and commercializing products and solutions for national defense and security. It is being conducted in collaboration with the Atal Incubation Mission. The swift advancement of homegrown technology, encouraging collaboration with startups for joint ventures, and cultivating a co-innovation culture in technology within the aerospace and defense industries are among the goals.
