Bharat Dynamics, Paras Defence, BEL, and other defence stocks zoom up to 6% as DAC approves Rs 54,000 crore procurement proposals

Defence stocks surged up to 6% on Friday after the Defence Acquisition Council (DAC) granted Acceptance of Necessity (AoNs) for eight capital acquisition proposals worth over Rs 54,000 crore. These approvals, aimed at strengthening the Indian Armed Forces, include key procurements for the Army, Navy, and Air Force.

Bharat Dynamics (BDL) shares surged the most, rising 5.6% to an intraday high of Rs 1,317 on the BSE, followed by DCX Systems, which rallied 5% to Rs 251.40. Meanwhile, BEML shares climbed 4.8%.

Shares of Paras Defence and Space Technologies shot up by 2.5%, while Bharat Electronics (BEL), Hindustan Aeronautics (HAL), and Cochin Shipyard shares were up between 1-2%.

For the Indian Army, the DAC approved the procurement of 1,350 HP engines to upgrade the existing 1,000 HP engines in T-90 tanks. This enhancement is expected to improve battlefield mobility, particularly in high-altitude areas, by increasing the tanks’ power-to-weight ratio.

For the Indian Navy, the council sanctioned the procurement of Varunastra torpedoes, an indigenously developed ship-launched anti-submarine weapon designed by the Naval Science & Technological Laboratory. These torpedoes will enhance the Navy’s ability to counter submarine threats.

For the Indian Air Force, the DAC approved the acquisition of Airborne Early Warning & Control (AEW&C) aircraft systems, advanced surveillance platforms that serve as force multipliers, significantly enhancing combat readiness and operational effectiveness.

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Faster Procurement Process to Cut Delays

Alongside approving new military purchases, the Defence Ministry is implementing reforms to speed up the procurement process. Bureaucratic delays have long plagued India’s defence acquisitions, with past deals like Rafale fighters and Scorpene submarines facing extended timelines.

Under new guidelines, the ministry aims to reduce the average acquisition timeline from 96 weeks (two years) to just 24 weeks (six months). “The defence ministry wants the cumbersome capital acquisition procedure, governed by a voluminous Defence Acquisition Procedure (DAP) manual, running into 657 pages across two volumes, to be made more efficient so that acquisition of much-needed platforms is not delayed,” at least three top officials told Hindustan Times.

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Stricter Deadlines for Key Stages

To achieve this accelerated timeline, several changes are being introduced. The first major shift requires the armed forces to prepare the Request for Proposal (RFP) at the same time they seek Acceptance of Necessity (AoN) for any acquisition. Previously, the RFP process would only begin after AoN approval, leading to unnecessary delays.

Field Evaluation Trials, another time-consuming step, will also be revamped. Traditionally, these trials could take years, as equipment needed to be tested in both polar and desert conditions. Now, the ministry wants the process completed faster by conducting tests under simulated conditions.

Contract negotiations will also be put on a strict timeline. The Contract Negotiation Committee (CNC), which finalises pricing with suppliers, will now have a maximum of six months to complete its process. This change is aimed at avoiding prolonged price discussions, which have previously slowed down major defence deals.

Once the finance ministry clears the negotiated price, the deal will quickly move to the Cabinet Committee on Security (CCS), led by the Prime Minister, for final approval.

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Preventing Cost Overruns and Strengthening Accountability

The defence ministry’s push for faster acquisitions is not just about speed. The government also wants greater accountability in the procurement process. One of the key issues with delays is the risk of cost escalations. As one official put it, the reforms aim to “hold both the armed forces and the ministry accountable in case the price of the platform changes due to delays.”

Over the years, major defence deals—such as Rafale fighters, Predator drones, and additional Scorpene-class submarines—have faced extended negotiations, sometimes leading to price increases and logistical challenges. By enforcing strict deadlines and parallel processing of key stages, the government aims to ensure that critical platforms reach the armed forces without unnecessary setbacks.

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