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<ul><li>The Indian government has pushed through a stack of defence projects to the tune of $1.2 billion on August</li><li>This comes after the Defence Acquisition Council (DAC) had already approved arms projects worth $5.5 billion last month. </li><li>The biggest beneficiary, <keyword id="86569" type="COMPANY" weightage="20" keywordseo="Hindustan-Aeronautics-Limited">Hindustan Aeronautics Limited</keyword> (HAL), saw its share price jump by over 4% as markets opening today morning. </li><li>The entire $1.2 billion will be spent on the domestic industry with companies like Hindustan Aeronautics Limited (HAL) and <keyword id="534703" type="COMPANY" weightage="20" keywordseo="Bharat-Heavy-Electricals-Limited">Bharat Heavy Electricals Limited</keyword> (BHEL) reaping the benefits.</li></ul>India is spending another ₹8.7 lakh crore ($1.2 billion) on defence projects after having already having approved ₹38.9 lakh crore ($5.5 billion) for arms projects last month. <div type="Article" hostid="261" msid="77098939" title="New drones, Rafale fighter jets, tanks and much more — India-China border dispute has lit a fire to upgrade military technology" mstype="2" mssubtype="0"></div> Last time around the lion’s share of the capital— around ₹31.1 lakh crore ($4.44 billion) — was directed towards the domestic industry. This time the entire amount is going to local manufacturers like Hindustan Aeronautics Limited (HAL) and Bharat Heavy Electricals Limited (BHEL). HAL's share price saw a jump over 4% as markets opened today morning. <div type="image" title="HAL share price" msid="77497628" hostid="261" caption="&amp;lt;p&amp;gt;HAL&amp;#39;s share price since July&amp;lt;/p&amp;gt;"></div> BHEL's share price on the other hand remained muted showing a marginal uptake of over 1%. <div type="image" title="BHEL share price since July" msid="77497651" hostid="261" caption="&amp;lt;p&amp;gt;BHEL share price since July&amp;lt;/p&amp;gt;"></div> The projects approved by the Defence Acquisition Council (<a href="https://pib.gov.in/PressReleseDetail.aspx?PRID=1645092">DAC</a>) in its meeting today headed by India’s Defence Minister Rajnath Singh include new aircraft, more firepower for the <keyword id="6355100" type="ORGANIZATION" weightage="20" keywordseo="Indian-Navy">Indian Navy</keyword>, as well as approvals that will speed the procurement and upgrades of unmanned aerial vehicles (UAVs). The <keyword id="15141" type="ORGANIZATION" weightage="20" keywordseo="Indian-Air-Force">Indian Air Force</keyword> (IAF) needs more eyes in the sky In July, the DAC approved the proposal to procure 21 new MiG-29 aircraft along with upgrading the existing 59 already enlisted with the Air Force. It also sanctioned buying 12 new Sukhoi-20 MK I aircraft. Pushing on the narrative of Athmanibhar Bharat, self-reliant India, the government has put an order for 106 of the newly developed Basic Trainer Aircraft from HAL. Initially, 70 of these jets will be inducted to meet the IAF’s training requirements once they receive the required certification. The remaining 36 will be picked up once the HTT-40 fleet — another trainer aircraft that HAL invested ₹550 crore to develop — is operational. Increasing the Indian Navy’s firepower Other than, the primary beneficiary of the DAC’s project approval is BHEL. The government has approved the procurement of an upgraded version of the Super Rapid Gun Mount (SRGM). It is the main fun onboard Navy and Indian Coast Guard warships. According to the government, the upgraded version of the SRGM will increase the capabilities of the warships to manoeuvre against fast-moving targets like missiles. It will also enhance the engagement range of the guns. The <keyword id="6354416" type="ORGANIZATION" weightage="20" keywordseo="Indian-Army">Indian Army</keyword> won’t be left out of the fray. It will be getting new 125 mm Armour Piercing Fin Stabilised Discarding Sabot (APFSDS) ammunition. 70% of the product will be made in India and the ammunition will be brought in under a ‘design and development case’. Other approvals are aimed at speeding up the procurement of Indo-Russian AK 203 guns and push through faster upgrades for UAVs. SEE ALSO: <a href="https://www.businessinsider.in/defense/news/tcs-tech-mahindra-hcl-tech-and-wipro-could-gain-from/articleshow/77478306.cms">India's armed forces are potential clients for TCS, Tech Mahindra, HCL Tech and the likes</a> <a href="https://www.businessinsider.in/defense/news/heres-a-full-list-of-weapons-that-indias-defence-sector-can-get-from-local-companies/slidelist/77459796.cms">List of weapons that India can make at home — and the ones it cannot</a> <a href="https://www.businessinsider.in/defense/news/indias-defence-ministry-introduces-import-embargo-on-101-items-to-boost-atmanirbhar-bharat-abhiyan/articleshow/77442031.cms">India’s Defence Ministry introduces “import embargo” on 101 items to boost Atmanirbhar Bharat Abhiyan</a>

HAL's share price jumps 4% after India approves defence projects worth $1.2 billion

New Delhi, Feb 12 () State-run engineering firm BHEL on Wednesday said it has signed a pact with Rosoboronexport, Russia, for cooperation and undertaking projects for defence systems. The memorandum of understanding (MoU) was signed during the 5th India Russia Military Industrial conference held in Lucknow, BHEL said in a statement. The aim of the MoU is to cooperate and undertake joint projects and operations for defence systems. This will help in leveraging BHEL's capabilities in the defence sector in association with Russian OEMs under the 'Make in India' initiative and offer indigenous support and solutions to the Indian defence forces, it added. KKS ABM

BHEL signs pact with Russian firm for defence projects

<ul><li><keyword id="6354446" type="UNKNOWN" weightage="20" keywordseo="bhel">BHEL</keyword> has invited foreign companies to ‘Make in India’ as it seeks to capitalise on US-China tensions to solve its cash flow issues.</li><li>Investors cheered the move as the stock surged nearly 10% in two days.</li><li>BHEL’s stock has taken a beating this year, losing half its value after missing FY20 sales by 20%.</li></ul>Bharat Heavy Electricals Limited has invited foreign companies to use its facilities to set up manufacturing bases in the country. The government-owned company has floated an expression of interest in this regard. The stock surged nearly 10% in two days before cooling off, as investors cheered the initiative of a state-owned company looking to invite foreign companies on the fence in China and at the same time resolve its cash flow issues — two birds with one stone. <div type="image" title="BHEL stock 01_01_20 to 04_05_20." msid="75548252" hostid="261" caption="&amp;lt;p&amp;gt;BHEL share price in 2020&amp;lt;/p&amp;gt;"></div> For the year 2020 so far, BHEL’s stock has lost half its value due to the company missing FY20 sales by 15-20%, exacerbated further by the nationwide lockdown and the resulting cash flow concerns, IIFL securities said in its report dated April 20, 2020. “Over the past few weeks, new risks have emerged (of 2nd wave) and hence social distancing is likely to last longer – hampering operations as well as demand across sectors. This will lead to underutilized capacities in the interim, and cash flow issues,” said Axis Capital in its report dated April 21, 2020. The research firm gave BHEL a ‘Buy’ rating with a target price of ₹32, which is an upside of 41% on the current market price of ₹23. BHEL may sell a few units, suggests a new report According to an IANS report, BHEL may sell four to five units of its non-core manufacturing business under government's asset monetisation process during the ongoing financial year. The government also plans to dilute its equity in power equipment manufacturing entity to 26 per cent in phases under the plan unveiled in last years budget. According to official sources, out of the total 16 manufacturing units of the company, few units which do not have material synergies with its core business, such as transportation and water may be put to sale. BHEL has 16 manufacturing facilities across India and has manpower strength of more than 34,000 with 9,000 engineers. This should augur well for foreign companies looking for qualified and skilled labour. “A key lesson for businesses is that the decentralization of manufacturing will have to be adopted as a major strategy to mitigate disruption risks associated with concentrated and localized operations,” BHEL said on May 4. “Rising trade war tensions between the <keyword id="6354458" type="UNKNOWN" weightage="20" keywordseo="US">US</keyword> and China and dire economic news at home have added to the negative sentiment. The lockdown extension and fear that the economy and businesses will take longer to get back on track impacted the markets,” said Vinod Nair, Head of Research at Geojit Financial Services to <a href="https://economictimes.indiatimes.com/markets/stocks/news/ahead-of-market-12-things-that-will-decide-stock-action-on-tuesday/articleshow/75538196.cms">Economic Times</a>. See also: <a href="https://www.businessinsider.in/business/news/bhel-signs-pact-with-russian-firm-for-defence-projects/articleshow/74101281.cms">BHEL signs pact with Russian firm for defence projects</a> <a href="https://www.businessinsider.in/stock-market/news/global-markets-dive-as-the-us-ratchets-up-tensions-with-china-over-the-coronavirus/articleshow/75532989.cms">Global markets dive as the US ratchets up tensions with China over the coronavirus</a> <a href="https://www.businessinsider.in/business/news/sensex-nosedives-over-1500-pts-nifty-tanks-below-9500/articleshow/75527010.cms">Between US-China bickering and earnings bummer from RIL and HUL, Sensex has lost over 4% in first hour of trading</a>

The way BHEL is trying to turn the tide is a sign of how India wants to capitalise on US-China tensions

<ul><li>As ISRO is busy making plans to explore the space, the stock of Telangana-based government company <keyword id="2044704" type="PERSON" weightage="20" keywordseo="Mishra-Dhatu-Nigam">Mishra Dhatu Nigam</keyword> has been skyrocketing. </li><li>It supplies ultra high strength steel for rockets and satellites. </li><li>In January, <keyword id="907560" type="ORGANIZATION" weightage="20" keywordseo="MIDHANI">Midhani</keyword> dispatched its first delivery of steel for Ignitor box and Cobalt alloy for Throat Sitting Ring for the mission ‘<keyword id="6797456" type="UNKNOWN" weightage="20" keywordseo="Gaganyaan">Gaganyaan</keyword>’ — which is expected to take off next year. </li><li>As India’s premier space agency preps for 15-16 launches per year it is expected to bring in orders worth ₹250-300 crore per annum.</li></ul>As the <keyword id="116095" type="ORGANIZATION" weightage="20" keywordseo="Indian-Space-Research-Organisation">Indian Space Research Organisation</keyword> (ISRO) is busy making plans to explore the space, the stock of a Telangana-based government company has been skyrocketing. Mishra Dhatu Nigam, also goes by its acronym MIDHANI, which has a monopoly in supplying ultra-high-strength steel for rockets and satellites has translated into a 35% growth in revenue for the third quarter. The stock has increased from ₹150 to nearly ₹217 in the last two weeks. But this may just be the beginning. ICICI Securities believes that returns from this stock is at 20% and it also raised its target price to ₹326 from ₹242, earlier. 
 
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 What's so special about MIDHANI? Half of the orders that the company receives are from ISRO, which is on a growth path. ISRO has several space missions lined up including Chandrayaan 3, Mangalyaan 2 and two unnamed missions as well. In order to pull off these projects, Finance Minister Nirmala Sitharaman, in her latest budget speech, allocated ₹13,479 crore for space exploration — increasing 8% from last year. As India’s premier space agency preps for 15-16 launches per year it is expected to bring in orders worth ₹250- ₹300 crore per annum. This will be a major part of the ₹800 crore orders they would add per year.The supply of material to ISRO typically starts nearly two years prior to the launch. “Increasing order inflow from ISRO over the years has led to a higher topline. Also, MIDHANI has managed to better its yield i.e. more output from lesser input,” said a report by ICICI Securities. Size does matter The company which operates under the Ministry of Defence now supplies 40% to the sector that it was originally intended for. In the last few years, increased space activity for large scale projects like Chandrayaan 2 has given it a spurt. Moreso, it added economies of scale to its business — bringing in unexpected levels of operational efficiency. Last year, its margin expanded to a massive 73-95%. “MIDHANI’s higher value of production leading to operating leverage benefits; lower rejections; lower power costs, and bulk buying of raw materials are some of the reasons,” the report said. The reduction in corporate tax rate also added to its coffers. On January 6, 2020, Midhani dispatched its first delivery of <a href="http://midhani-india.in/news_marquee/midhani-delivers-ultra-high-strength-steel-cobalt-alloys-for-gaganyaan-of-isro/">steel for Ignitor box and Cobalt alloy for Throat Sitting Ring for the mission ‘Gaganyaan’</a> — which is expected to take off next year. As it demonstrates its ability to efficiently supply large and mission critical orders, it will also pave the way for its ambitions of becoming a multinational company. Over 70% of the company’s production is supplied to Defence Research &amp; Development Organisation (DRDO), Indian Space Research Organisation (ISRO), Hindustan Aeronautics (HAL), and Department of Atomic Energy (DAE). While the rest goes to the commercial companies including Larsen &amp; Toubro and BHEL. See also: <a href="https://www.businessinsider.in/science/space/news/indias-new-rocket-will-let-isro-launch-satellites-month-on-month/articleshow/73892024.cms">India’s new rocket will let ISRO launch satellites month-on-month</a> <a href="https://www.businessinsider.in/budget/news/isro-space-budget-2020-allocation-and-updates/articleshow/73830948.cms">ISRO Budget 2020 allocated ₹13,479 crore for space exploration</a> <a href="https://www.businessinsider.in/careers/news/isro-is-hiring-scientific-and-technical-assistants-at-a-salary-of-44900-per-month-check-and-apply-isro-gov-in/articleshow/74172112.cms">ISRO is hiring scientific and technical assistants at a salary of ₹44,900 per month, check and apply @isro.gov.in</a>

The hottest Indian company that gives ISRO the metal for its rockets and satellites

Finance Minister Nirmala Sitharaman on Tuesday announced a cut in customs duty on minerals such as lithium, copper and cobalt, which are critical for nuclear energy, renewable and other sectors, to give a fillip to the energy transition. In her budget speech in Lok Sabha, Sitharaman recalled that in the interim budget she had announced a strategy to sustain high and more resource-efficient economic growth, along with energy security in terms of availability, accessibility and affordability. "We will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability," she said. Noting that minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, <keyword id="19895602" type="General" weightage="20" keywordseo="renewable-energy" source="keywords">renewable energy</keyword>, space, defence, telecommunications, and high-tech electronics, she proposed to fully exempt customs duties on 25 critical minerals and reduce BCD (basic customs duty) on two of them. This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors, she said. She stated that energy transition is critical in the fight against climate change. To support energy transition, she proposed to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country. Further, she stated that in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, I propose not to extend the exemption of customs duties provided to them. Noting that steel and copper are important raw materials and to reduce their cost of production, she proposed to remove the BCD on ferro nickel and blister copper. "I am also continuing with nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5 per cent on copper scrap," she said. About the PM Surya Ghar Muft Bijli Yojana, which was rolled out earlier this year, he informed the House that in line with the announcement in the interim budget, PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore households obtain free electricity up to 300 units every month. The scheme has generated remarkable response with more than 1.28 crore registrations and 14 lakh applications, and we will further encourage it, he stated. She further stated that a policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable &amp; intermittent nature in the overall energy mix. She stated that nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat. Towards that pursuit, our government will partner with the private sector for setting up Bharat Small Reactors; research &amp; development of Bharat Small Modular Reactor and research &amp; development of newer technologies for nuclear energy, she informed the House. The R&amp;D funding announced in the interim budget will be made available for this sector, she added. The development of indigenous technology for Advanced Ultra Super Critical (AUSC) <keyword id="20421620" type="General" weightage="20" keywordseo="thermal-power" source="keywords">thermal power</keyword> plants with much higher efficiency has been completed, she informed the House. A joint venture between NTPC and BHEL will set up a full-scale 800 MW commercial plant using AUSC technology and the government will provide the required fiscal support, she added. Moving forward, the development of indigenous capacity for the production of high-grade steel and other advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy, she pointed out. A roadmap for moving the 'hard to abate' industries from 'energy efficiency' targets to 'emission targets' will be formulated, she stated adding that appropriate regulations for the transition of these industries from the current 'Perform, Achieve and Trade' mode to 'Indian Carbon Market' mode will be put in place. She further stated that an investment-grade energy audit of traditional micro and small industries in 60 clusters, including brass and ceramic, will be facilitated. Financial support will be provided for shifting them to cleaner forms of energy and implementation of energy efficiency measures. The scheme will be replicated in another 100 clusters in the next phase, she stated. Gaurav Kedia, Chairman, Indian Biogas Association said that the <keyword id="19908389" type="General" weightage="20" keywordseo="Union-Budget" source="keywords">Union Budget</keyword> 2024 has unveiled a roadmap towards a sustainable and resilient India, with agriculture and energy security at its core. It is anticipated that these initiatives will catalyze the growth of the biogas industry, leading to increased rural employment, reduced carbon emissions, and improved soil health, he stated. SEE ALSO:<a href="https://www.businessinsider.in/budget/news/budget-2024-25-changes-to-tax-slabs-increased-standard-deduction-and-other-changes-to-direct-taxation/articleshow/111951205.cms" target="_blank"></a> <a href="https://www.businessinsider.in/budget/news/budget-2024-25-changes-to-tax-slabs-increased-standard-deduction-and-other-changes-to-direct-taxation/articleshow/111951205.cms" target="_blank">Budget 2024-25 – Changes to tax slabs, increased standard deduction and other changes to direct taxation</a><a href="https://www.businessinsider.in/business/news/expectations-from-union-budget-2024-25-how-will-this-budget-impact-you/articleshow/111946291.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/news/expectations-from-union-budget-2024-25-how-will-this-budget-impact-you/articleshow/111946291.cms" target="_blank">Union Budget 2024-25: How will this budget impact you?</a> <a href="https://www.businessinsider.in/budget/news/budget-2024-record-allocation-of-rs-1-48-lakh-crore-for-education-employment-and-skilling/articleshow/111951228.cms">Budget 2024: Record allocation of Rs 1.48 lakh crore for education, employment and skilling!</a>

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HAL's share price jumps 4% after India approves defence projects worth $1.2 billion

Prabhjote Gill

BHEL signs pact with Russian firm for defence projects

PTI

The way BHEL is trying to turn the tide is a sign of how India wants to capitalise on US-China tensions

Rounak Jain

The hottest Indian company that gives ISRO the metal for its rockets and satellites

Prerna Sindwani

FM cuts customs duty on minerals critical for energy transition

PTI

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