Defence Ministry on 12th April (Friday) issued a tender to the public sector firm Hindustan Aeronautics Limited (HAL) for the purchase of made-in-India 97 LCA Tejas Mark 1A fighter jets expected to be worth Rs 65,000 crores. The shares of HAL have jumped over 155 per cent, compared to a 27 per cent rise in the benchmark Nifty50 index.
The tender was issued by the Defence Ministry recently and has given HAL 3 months to respond.
Tejas, our new fighter jet?
The Ministry of Defense had earlier ordered 40 Tejas Mark 1 fighter jets (2 squadrons) and following that another order of 83 Tejas Mark 1A fighters (4 squadrons) was placed. HAL is close to completing these orders and the six squadrons ordered will be supplemented by the five squadrons (97 Tejas Mark 1A) now ordered.
Tejas Mark 1A was designed by the Defence Research & Development Organisation (DRDO) and built by HAL. This is a multirole aircraft and can be used for air defence, maritime and strike.
This programme will help the Indian Air Forces (IAF) to indigenous its fleet and reduce dependency on foreign countries and companies. The IAF has an increasing problem of its depleting fleet as all the best planes we hold in terms of usage are retiring quickly. The MiG-21s we use today are also called the “flying coffin” because the parts for maintenance of these planes aren’t available anymore. Despite this, we use them at a large number because of the unavailability of better jets.
The direct competition to the IAF’s Tejas is the Chinese JF-17 Thunder which is a cheap and lightweight fighter for the Pakistani army. More than 100 JF-17s have been added to the Pakistani fleet since 2007.
The HAL is also set to buy over 200 LCA Mark 2s and similar fifth-generation advanced medium combat aircraft.
HAL’s share prices hit a new high
After the deal, the share prices of PSU Hindustan Aeronautics Limited (HAL) rose more than three per cent hitting a new lifetime record high during the intra-day trading on Friday, April 12.
The shares of HAL opened at Rs 3,564.65 and were locked at Rs 3677, reaching a 52-week high mark. According to Trendlyne data, HAL has given better returns compared to Nifty 50 and Sensex in the last year. In the past month, HAL gave 11.34 per cent returns, against 0.11 per cent and 0.17 per cent returns by Nifty 50 and Sensex respectively.
In the last year, HAL has given 158.8 per cent returns to investors as against 27.78 per cent and 24.06 per cent returns by Nifty 50 and Sensex respectively.
Defence’s growing Tejas exports
As of December 2023, HAL is in talks with six buyer countries to export Indian LCA Tejas. “Talks have picked up pace with Argentina, the Philippines and Nigeria,” HAL chief managing director CB Ananthakrishna said.
Countries like Botswana and Egypt have also shown interest in India’s home-grown aircraft.
Argentina has a long conflict with Britain and it is becoming an obstacle to the Tejas Deal. On being asked about Argentina’s concern over the UK-origin parts being used in the aircraft, the HAL CMD said that “that part will be taken care of.” The LCA Tejas has over 15 British components, including Martin Baker’s ejection seat, about which the Argentinians have flagged their concern.
HAL also organised several exhibitions and programmes to promote India-made defence products. “It will serve as a hub for professionals, industry leaders and stakeholders from the aviation sector and they will have networking opportunities to establish meaningful connections, foster collaborations and explore potential business partnerships,” HAL director (Engineering and R&D) DK Sunil said during the ‘HAL Avionics Expo-2023’.
The Indian exports of defence equipment have continuously grown. India’s defence exports have reached an all-time high of `15,920 crore in FY2023.
