At 11:29 AM on Friday, the BSE India Defence index was the top gainer among thematic indices up 1 per cent as compared to 0.11 per cent rise in the BSE Sensex.

Defence companies share price movement

Shares of defence companies were in demand and rallied up to 12 per cent on the BSE in Friday’s intra-day trade backed by heavy volumes.

Paras Defence and Space Technologies, Ideaforge Technology, Astra Microwave Products, Data Patterns (India) and Adani Enterprises from the BSE India Defence index hit their respective 52-week highs on the BSE in intra-day deals.

Among individual stocks, Paras Defence and Space Technologies soared 12 per cent to ₹994.40 on the back of three-fold jump in trading volumes. A combined 10.95 million equity shares changed hands on the NSE and BSE.

Share price of Ideaforge Technology was locked at upper circuit for the second straight day, up 5 per cent at ₹943.50.

Meanwhile, Hindustan Aeronautics (HAL) and Bharat Dynamics (BDL), the frontline PSU defence stocks rose 1 per cent each.

At 11:29 AM on Friday; the BSE India Defence index, was the top gainer among thematic indices, up 1 per cent, as compared to 0.11 per cent rise in the BSE Sensex.

What’s driving defence stocks?

The Ministry of Defence (MoD) has approved a revised delegation of financial powers for the armed forces, significantly enhancing the spending authority of field commanders to expedite procurement and project execution. Financial powers across procurement, medical and works projects have been increased by up to 100 per cent and, in certain cases, more than doubled.

The revised framework will facilitate procurements of over ₹1.25 trillion through the revenue route and includes a twofold increase in financial powers for defence indigenisation and R&D.

The move is expected to accelerate procurement cycles, improve execution timelines and support faster induction of indigenous defence equipment, creating a positive environment for domestic defence manufacturers across platforms, electronics, ammunition, drones and strategic systems.

Meanwhile, India’s defence sector is undergoing rapid transformation, shifting from a major importer to a growing manufacturer, driven by the Atmanirbhar Bharat initiative, higher budgetary allocations, and focus on indigenous production. The sector comprises several segments, including military fixed-wing aircraft, naval vessels and surface combatants, missiles and missile defence systems, military rotorcraft, submarines, artillery, tactical communications, electronic warfare, and military land vehicles.

To modernise its armed forces and reduce imports, the government has implemented several initiatives under the Make in India and the Defence Procurement Procedure (DPP) programmes, providing policy support to encourage defence manufacturing. These measures aim to promote self-reliance and boost innovation and technological advancements in India’s defence capabilities. In the Union Budget 2026-27, the government allocated ₹7.85 trillion crore for the defence sector, an increase of 16 per cent over the previous year’s allocation, Adani Enterprises said in its FY26 annual report.

ICICI Securities view on defence sector

The framework enables procurement of over ₹1.25 trillion through the revenue route, which comes in addition to the FY27 defence budget allocation of ₹1.39 trillion earmarked for procurement from domestic defence industries. Combined with the policy mandate reserving 75 per cent of the capital acquisition budget for domestic players, the move is expected to accelerate procurement cycles, improve order conversion and support faster execution of indigenous programs.

The doubling of financial powers for indigenisation and R&D is particularly positive for domestic defence manufacturers including BEL, HAL, BDL, Solar Industries, Astra Microwave, Data Patterns, Zen Technologies and other private sector defence players, as it could drive higher repeat orders, emergency procurements and faster induction of indigenous systems across electronics, ammunition, drones, missiles, communication systems and strategic platforms, ICICI Securities said in a note.

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