Why Defence Stocks HAL, GRSE and Astra Microwave Are Rallying on May 27; Nifty India Defence Index Hits 52-Week High

The Nifty India Defence Index, which reflects the performance of companies representing the defence sector, surged past a fresh 52-week high on Tuesday, May 27. As of 10:49 AM, the index was trading over 1% higher, outperforming the frontline indices, which were in the red. The defence stocks are rallying on May 27 amid an important announcement. 

Why Defence Stocks Are Rallying on May 27

This rally in defence stocks was largely fuelled by a key policy development from the Ministry of Defence. Raksha Mantri Shri Rajnath Singh approved the execution model for the Advanced Medium Combat Aircraft (AMCA) programme, which will now be led by the Aeronautical Development Agency (ADA) in collaboration with industry partners.

AMCA Programme Receives Execution Model Approval

In a decisive move to strengthen India’s indigenous defence capabilities and expand its domestic aerospace ecosystem, the Defence Ministry gave its nod to the execution model for the AMCA programme. This initiative marks a critical milestone in India’s journey towards self-reliance in advanced combat aircraft development.

Under this model, the ADA will oversee the execution in partnership with Indian industry players. The model is designed to provide equal opportunities to both public and private sector companies. These companies can participate independently or through joint ventures or consortia, provided they comply with Indian laws and regulations.

A Step Towards Aatmanirbharta in Aerospace

The approval of the AMCA execution model is seen as a key enabler of indigenous development in the aerospace sector. By inviting competitive bids from Indian entities, the government aims to leverage local expertise and manufacturing capabilities. The focus is on building a prototype of the AMCA, which is expected to be a fifth-generation fighter aircraft tailored to India’s defence needs.

To kickstart the process, ADA will soon issue an Expression of Interest (EoI) for the development phase of the AMCA. This is expected to galvanise industry participation and accelerate the project timeline.

Defence Stocks Astra Microwave, HAL, GRSE in Focus 

Following the announcement, several stocks within the Nifty India Defence Index posted notable gains as of 10:49 AM on May 27, 2025.

• Mishra Dhatu Nigam and Astra Microwave Products were each up by over 3%
   
• Garden Reach Shipbuilders & Engineers (GRSE), MTAR Technologies, Bharat Dynamics (BDL), and Cochin Shipyard advanced by over 2%
   
• Hindustan Aeronautics (HAL) rose by 1.28%

Read More: India’s Defence Exports: Targeting ₹50,000 Crore by 2029

Conclusion

The rally in defence stocks underscores investor optimism around India’s renewed focus on indigenous defence development and the opportunity it presents for listed companies in the sector.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.