Shares of defence sector companies rallied up to 14 percent on Monday after the Ministry of Defense announced to introduce import embargo on 101 items beyond a given timeline to boost indigenization of defence production.
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The restrictions on the import of 101 weapons and military platforms including artillery guns, assault rifles, and transport aircraft in what could give a major fillip to the domestic defence industry.
Shares of Bharat Electronics which rallied over 14 percent, BEML surged over 6 percent. Larsen & Toubro gained over 5 percent and was among the top Nifty50 gainer.
Apollo Micro Systems and Bharat Forge surged 6.5 percent each.
Ashok Leyland, the vehicle supplier to the Indian Army, rallied over 3 percent.
The state-run Bharat Dynamics that supplies MoD with missiles, torpedoes, and allied defense equipment, also surged almost 11 percent and Hindustan Aeronautics rose over 9 percent.
Reliance Naval & Engineering and Walchandnagar Industries hit an upper circuit of 5 percent each.
Speaking to CNBC-TV18, Jayant D Patil, whole-time director, and senior executive vice president, L&T's Defence Business said that India had capabilities to manufacture 69 of 101 equipment under import embargo.
"Uncertainty that much of order of these items will dry up is gone. Many of the product segments are already being made locally. The 32 items beyond the 69 already being made, will take some time to develop," Patil said.
He believes govt will come up with more measures to boost domestic defence industries and expects many more such lists to come going ahead.