Defence PSU stocks gains as CCS clears defense deals worth Rs 80,000 crore

Defense PSU stocks, including Hindustan Aeronautics Defense, Bharat Dynamics, and Bharat Electronics, gained up to 4 percent on October 10. The surge comes after defense deals worth Rs 80,000 crore for Predator drones and 2 nuclear submarines were approved by the Prime Minister Narendra Modi-led Cabinet Committee on Security (CCS).

The CCS has cleared the deal for buying 31 Predator drones from the USA. Under the deal, India will get 31 High Altitude Long Endurance (HALE) UAVs, of which the Navy will get 15 SeaGuardian drones, while the Army and the Indian Air Force will get eight each of the land version – SkyGuardian.

The second major defense deal which has been cleared by the CCS is the manufacturing of two nuclear-powered attack submarines at the Ship Building Centre in Vishakhapatnam will be around Rs 45,000 crore.

The move will boost the country's naval as well as surveillance capabilities. Reportedly, the Indian Navy as part of the deal would get two nuclear-backed attack submarines, designed to significantly improve its operational capabilities in the Indian Ocean Region.

The manufacturing of the two new nuclear submarines will reportedly involve major participation from private sector firms such as Larsen and Toubro (L&T). The MQ-9B 'hunter-killer' drones are being procured from US defense major General Atomics through the foreign military sales route, at a total cost of around $3.1 billion.