HFCL enters defence manufacturing with ₹230 crore Andhra Pradesh facility

HFCL Ltd has approved the establishment of a defence manufacturing facility in Andhra Pradesh with an estimated capital outlay of around ₹230 crore, marking the company’s strategic entry into high-value defence manufacturing.

In an exchange filing on May 14, the company said its board approved the setting up of the facility in Sri Satya Sai district of Andhra Pradesh for the manufacture of Multi-Mode Hand Grenades (MMHG) and similar defence products.

The proposed facility will have an estimated production capacity addition of around 40 lakh units and is expected to be completed by December 2027.

HFCL said the move aligns with India’s broader “Aatmanirbhar Bharat” initiative and the government’s increasing focus on defence indigenisation and domestic manufacturing capabilities.

The company noted that the domestic and global defence sectors are witnessing strong growth driven by heightened geopolitical uncertainties, increasing investments by governments worldwide, and rising emphasis on national security.

According to the filing, India’s defence sector is currently benefiting from strong policy support through import substitution measures, indigenous procurement programmes and long-term defence procurement opportunities.

HFCL said the new facility will help the company design, develop and manufacture advanced defence systems, while also strengthening its defence product portfolio and long-term growth prospects.

The company added that the investment is expected to significantly enhance HFCL’s capabilities in defence manufacturing and create a platform for future growth opportunities arising from global supply chain realignment and defence modernisation programmes.

The project will be funded through a mix of internal accruals, debt financing and proceeds from preferential issuance of convertible warrants or a combination thereof.

HFCL, traditionally known for its telecom equipment, optical fibre and technology solutions business, has been steadily expanding its presence in the defence technology segment in recent years through products related to surveillance, communication and electronic systems.

The announcement reflects the growing participation of Indian private sector companies in defence manufacturing amid rising government emphasis on localisation and self-reliance in strategic sectors.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice.