India's Hindustan Aeronautics soars 14% on $6bln govt defence deal

Shares of HAL rose as much as 13.7% to 1,048 rupees in early trade

  
A man wearing a protective mask walks past the Bombay Stock Exchange (BSE) building in Mumbai, India, March 13, 2020.

A man wearing a protective mask walks past the Bombay Stock Exchange (BSE) building in Mumbai, India, March 13, 2020.

REUTERS/Francis Mascarenhas

BENGALURU - Shares of Indian aerospace and defence company Hindustan Aeronautics Ltd jumped nearly 14% on Thursday, a day after the government said it would buy 83 fighter aircraft from the company for over $6 billion in the biggest defence deal for a homegrown company.

Prime Minister Narendra Modi has undertaken a flagship campaign for a self-reliant India, under which his government wants companies to reduce imports, increase domestic production and play a bigger role in the global supply chain.

About 500 Indian companies in the design and manufacturing sectors will be working with HAL in this procurement, the government said on Wednesday evening. 

"(The Cabinet decision) will improve the capabilities of our armed forces, boost the indigenous defence industry and strengthen the movement to create a self-reliant India," Prime Minister Modi said on Twitter, while Defence Minister Rajnath Singh called it the largest indigenously-developed defence procurement deal and a "game changer".

The Light Combat Aircraft, named 'Tejas', is a single engine supersonic fighter plane made by HAL, and can achieve a speed of up to Mach 1.6 (1,975.68 km/hour), according to the company website.

In August last year, Singh said India will stop importing 101 items of military equipment in an effort to boost domestic production. 

Shares of HAL rose as much as 13.7% to 1,048 rupees in early trade, their highest level since late August, and were trading up 10.2% as of 0712 GMT.

($1 = 73.1070 Indian rupees)

(Reporting by Anuron Kumar Mitra in Bengaluru; Editing by Rashmi Aich) ((AnuronKumar.Mitra@thomsonreuters.com; +91 99863 58469;))

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