The stocks of private defence companies surged over 10 percent on the bourses after Defence Minister Rajnath Singh on Saturday said that the government plans to increase private participation in defence manufacturing.
The stocks of companies like Astra Microwave and Paras Defence rallied on Monday.
The scrip of Apollo Micro Systems opened 0.8 percent higher at Rs 358.10 apiece compared to the previous close of Rs 355.10 apiece.
It further surged to its 52-week high of Rs 401.80, which was 13.1 percent higher than the previous close.
Similarly, the stock of Paras Defence and Space Technologies opened 1.7 percent higher at Rs 812.05 apiece compared to the previous close of Rs 825.85 apiece.
During trading hours, the scrip surged up to 7.1 percent to Rs 869.80 apiece.
The stock of DCX Systems also gained 5.6 percent after rising to Rs 213.70 apiece compared to the previous close of Rs 202.25 apiece.
The stock of Data Patterns (India) climbed 4.4 percent to Rs 4,148.50 apiece compared to the previous close of Rs 3,970.95 apiece.
The rally in these stocks came after Defence Minister Rajnath Singh on Saturday said that the government wants to increase the share of private companies in defence manufacturing to 50 percent.
Singh highlighted that the share was negligible a few years ago but has now increased to 25-30 percent.
The minister said that the country has come a long way in defence manufacturing. India was once considered a major importer of defence equipment, but it could become one of the biggest exporters in the next 25-30 years.
“The private sector is not just a supplier of nuts and bolts in defence, but also a producer of state-of-the-art weapons systems,” the defence minister said.
He also highlighted the government’s efforts to liberalise foreign direct investment norms in the defence sector.
The rally in defence stocks resulted in a rise of about 1.3 percent in the Nifty India Defence Index on Monday.
