BEL Shares Drop 3% Despite Ministry Approval for JV with Israel Aerospace Industries

On September 30, 2024, shares of Bharat Electronics Limited (BEL) fell by up to 3.11%, reaching an intraday low of Rs 284.20. This decline occurred despite the company receiving approval from the Ministry of Corporate Affairs (MCA) to form a joint venture with Israel Aerospace Industries (IAI), named BEL IAI AeroSystems Private Limited.

The newly formed joint venture, BEL IAI AeroSystems Private Limited, aims to enhance India’s defense capabilities through collaboration with Israel’s leading aerospace company, Israel Aerospace Industries Limited. The MCA approved the incorporation of this joint venture on September 25, 2024.

In a filing with stock exchanges, BEL announced, "The Ministry of Corporate Affairs has approved the incorporation of 'BEL IAI AeroSystems Private Limited' on September 25, 2024, as a joint venture between Bharat Electronics Limited and Israel Aerospace Industries Limited."

Despite the JV approval, BEL’s stock performance did not reflect the positive development. The drop in share price comes after a period of strong financial performance. In the first quarter of FY25 (Q1FY25), BEL reported a 47% year-on-year increase in net profit, rising to Rs 791 crore from Rs 538.5 crore in the same quarter of the previous financial year (Q1FY24).