Forbes India 15th Anniversary Special

List of top defence stocks in India

Are you interested in India's defence industry? Learn about defence stocks, startups, and government initiatives driving innovation

Published: Jun 28, 2024 12:25:28 PM IST
Updated: Jun 28, 2024 03:08:57 PM IST


The Indian defence industry is a significant sector of the country's economy, with a growth trajectory that is only expected to accelerate due to ever-rising concerns about national security. With the world's second-largest army, India has a strong defence capability to protect its borders and citizens. And it makes sense to ensure it’s optimally leveraged.

The defence sector in India encompasses a wide range of areas, including aerospace, land, and naval systems. A diverse array of defence companies, both public and private, contribute to the manufacturing of defence equipment and supplies.

The defence industry has undergone a remarkable transformation, transitioning from being a major importer to becoming an exporter in recent years. In 2022, India was ranked fourth in the world regarding defence spending. During the 2023-24 financial year, defence exports surged by 32.5 percent, reaching an all-time high of Rs21,083 crore (approximately $2.63 billion). This is a significant increase from the previous year's exports of Rs15,920 crore.

In addition to increasing demand, government initiatives, and innovation, the Indian defence industry has witnessed a surge in economic growth. Over the past year, Indian defence stocks have seen a remarkable bull run on Dalal Street. According to corporate database ACE Equity data, as of April 26, 2024, the Nifty India Defense index had surged by an impressive 142 percent in the preceding 12 months.

List of Defence Stocks in India

Here’s the list of the leading defence stocks in India, based on their market capitalisation, with data sourced from NSE India and BSE India as of June 28, 2024.

Company Market cap (in Rs)
Hindustan Aeronautics Limited 3,52,614.96
Bharat Electronics Limited 2,22,802.06
Solar Industries India 90,585.07
Bharat Dynamics Limited 58,503.38
Cochin Shipyard Limited 58,035.62
Garden Reach Shipbuilders & Engineers Ltd 23,975.73
BEML Ltd 18,622.17
Zen Technologies 16,887.98
Data Patterns 16,800.79
Astra Microwave Products 9,026.42
Mishra Dhatu Nigam Limited 8,626.07
MTAR Technologies Limited 5,706.21
Paras Defence and Space Technologies Ltd 5,499.98
DCX Systems Limited 4,029.40
Ideaforge Technology Limited 3,363.65
Apollo Micro Systems Limited 3,193.07
Nibe Ltd 2,572.27
Rossell India limited 2,146.63
Taneja Aerospace & Aviation Ltd 1,573.38
CFF Fluid Control Ltd 1,567.67
Krishna Defence & Allied Industries Ltd 1,501.52
Sika Interplant Systems Ltd 1,373.82


Innovations transforming the Indian defence industry

India's defence sector has transformed significantly due to institutional and policy changes favouring indigenisation, domestic procurement, and exports. The 'Aatmanirbhar Bharat' initiative prioritises the Defense and Aerospace sector, emphasising indigenous manufacturing and R&D.

In the 2023-24 Union Budget, capital allocations for Defense modernisation rose to Rs1,62,600 crore, a 6.7 percent increase over FY 2022-23. The industry received Rs5.94 lakh crore – a 13 percent increase from the previous year.

The Indian Army has marked 2024 as the Year of Technology Absorption – a significant shift in its approach to modernisation. The initiative aims to integrate drones, counter-drone systems, and secure networks for enhanced operational capabilities. Prioritising indigenisation, the Army targets in-house AI, software, and unmanned aerial platform innovations.

Additionally, the Army is collaborating with the Ministry of Electronics and Information Technology (MeitY) to invest in cutting-edge technologies like indigenous 5G solutions, AI-driven tools, and cybersecurity measures. Notably, in November 2023, the Swedish arms major SAAB announced the first 100 percent Foreign Direct Investment (FDI) project to manufacture the Carl Gustav M4 rocket system.

Great progress has been made in constructing naval platforms. In September 2022, Prime Minister Narendra Modi unveiled INS Vikrant, India's largest warship ever. It underscores the government's support for indigenous manufacturing, involving SMEs and MSMEs.

Project 17A frigates, like INS Vindhyagiri, launched in August 2023, prioritise a balanced mix of weaponry and advanced technologies, reflecting India's evolving defence strategy. This project demonstrates a balanced approach, emphasising not only missiles, long-range artillery guns, multi-barrel rocket launchers, and tanks but also advanced radar, sensor, and electronic technologies.

Growth of Defence Startups in India

The "Make in India" and "Atmanirbhar Bharat" policies aim to reduce import dependence and encourage domestic production of defence technologies and products.

India is home to approximately 329 defence technology startups, all working on innovative solutions to strengthen the nation's defence efforts. Under the India-United States Defence Acceleration Ecosystem (INDUS-X), Indian and American startups will collaborate to co-develop and co-produce advanced technologies, including in areas such as space and artificial intelligence.
According to the Union Budget 2022-23, 25 percent of the defence R&D budget is designated for private industry and startups, fostering the innovation of new defence technologies within India.

Government funding and initiatives

The Indian government has implemented a range of funding schemes and initiatives to support and nurture startups across various sectors, including the Indian defence industry.

The Technology Development Fund (TDF) scheme

The Technology Development Fund (TDF), a flagship program of the Ministry of Defence under 'Make in India', aims to provide grant support to Indian industries, including MSMEs and startups, for developing Defence and dual-use technologies. Key features include funding support up to Rs10 crore, industry collaboration with academia, a project duration of two years, and eligibility for startups and individual innovators. Partnerships with academia and recognition by DPIIT are encouraged.

Innovations for Defence Excellence (iDEX)

iDEX, a flagship program of the Ministry of Defence, fosters innovation, entrepreneurship, and self-reliance in the defence sector. Launched during DefExpo 2018 by the Prime Minister, it aligns with the "Atmanirbhar Bharat Abhiyan." The scheme provides financial support to 300 startups/MSMEs/individual innovators and 20 partner incubators through the Defence Innovation Organisation (DIO).

Development of Innovative Technologies with iDEX (ADITI) scheme

The ADITI scheme, worth Rs750 crore from 2023-24 to 2025-26, operates within the iDEX framework of the Department of Defence Production, Ministry of Defence. It aims to develop 30 critical deep-tech strategic technologies while introducing a 'Technology Watch Tool' to align the Armed Forces' needs with the defence innovation ecosystem. The inaugural ADITI edition features 17 challenges across the Indian Army, Navy, Air Force, and Space Agency.

Defence India Startup Challenges (DISC)

Taking the iDEX initiative forward, The Defence India Startup Challenge, in partnership with Atal Incubation Mission, aims to support startups/MSMEs/innovators in creating prototypes and commercialising products/solutions for National Defence and Security. Objectives include the rapid development of indigenous technologies, promoting engagement with startups for co-creation, and promoting a culture of technology co-innovation within the defence and aerospace sectors.

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