Hindustan Aeronautics Shares Crash 8% on Reports of Being Shortlisted for Fighter Jet 

The share price of Hindustan Aeronautics Ltd (HAL) plunged more than 8% on 4 February, following reports that the state-owned defence giant had not been shortlisted to develop and produce next-generation fighter jets under the Advanced Multirole Combat Aircraft (AMCA) programme.

A report indicated that the Centre had shortlisted three private defence companies to develop and produce next-generation fighter jets under the Advanced Multirole Combat Aircraft (AMCA) programme. HAL, the largest state-owned defence company, has not been selected.

The government qualified bidders based on technical expertise, production capacity, order book, and financial strength.

The bidders were expected to demonstrate that they have the technical expertise to absorb the AMCA design, as well as enough experience in development, engineering, manufacturing, outfitting, and testing, according to the study.
 
A big outstanding order book, which indicates a delay in order execution, also influenced the selection process.
 
HAL has an outstanding order book worth Rs 2.52 trillion. One of the AMCA EoI’s criteria apparently stated that businesses with order books three times their sales would not be eligible for fighter jet manufacturing. HAL’s order book exceeds eight times its FY25 turnover of Rs 30,105 crore. 

With this, HAL is out of the running for India’s largest-ever military research and development initiative.

According to reports, Tata Advanced Systems Limited, Larsen & Toubro, and Bharat Forge have been shortlisted to develop next-generation fighter jets under the ACMA programme.

The selected bidder is said to work with the Aeronautical Development Agency (ADA) to develop five AMCA prototypes. The Defence Ministry allocated approximately Rs 15,000 crore at the prototype stage.

According to sources, the final order will be several times larger after the aircraft has been demonstrated and ordered by the Air Force.
 
Separately, fifth-generation fighter aircraft are projected to constitute the backbone of India’s air combat fleet beginning in the mid-2030s. Following its development, the armed forces are expected to place an initial order for approximately 120 jets, with induction scheduled to commence around 2035. The fleet size is expected to grow significantly over time as newer, more capable types enter manufacturing.

At 1:50 pm, the shares of Hindustan Aeronautics were trading 6.16% lower at Rs 4,195 on NSE. 

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