Balu Forge Industries Share Price Rise 8.69% As Company Signs 5-Year MoU For Large Calibre Ammunition Supply

Balu Forge Industries Ltd (BSE: 531112 | NSE: BALUFORGE) shares rose 8.69% to ₹483.60 as of 10:18 am IST on February 26, 2026, compared with the previous close of ₹444.95. The stock gained ₹38.65 in trade so far following the company’s regulatory disclosure announcing the execution of a five-year Memorandum of Understanding (MoU) for the supply of large calibre ammunition.

The development was confirmed through a press release dated 26 February 2026, submitted to the exchanges.

Why Balu Forge Industries Share Price Moved

The company stated it has entered into a five-year MoU for the supply of empty shells from its greenfield manufacturing campus in Belgaum, Karnataka. The agreement covers large calibre ammunition, beginning with 155 mm M107 and 152 mm variants, and may be extended to 105 mm, 120 mm and 81 mm categories subject to trials and approvals.

As per the disclosure, the initial committed volumes are 30,000 units per month of 155 mm M107 and 10,000 units per month of 152 mm shells, both in ‘Ready to Fill’ condition, for a period of five years. Pricing has been fixed at USD 315 per unit for both categories, indexed to the London Metal Exchange, with terms specified as FOB Nhava Sheva.

The company further stated that the MoU has been signed with a NATO-affiliated entity, though the end user has not been disclosed due to confidentiality provisions. Supplies are scheduled to commence from April 2026 in a phased manner.

Balu Forge Industries Stock Performance Snapshot

As of 10:18 am IST on 26 February 2026, the stock was trading at ₹483.60, up 8.69% for the day. So far in the session, it touched a high of ₹488.40 and a low of ₹452.00 so far. The opening price was ₹452.00.

The company’s market capitalisation stood at approximately ₹5,160 crore at the prevailing price levels. The 52-week high and low are ₹784.00 and ₹341.05, respectively, as per exchange data.

What this Means for Investors

Based on the disclosed volumes, the monthly contracted quantity totals 40,000 units, implying 480,000 units annually across the two initial categories. The company has stated that these volumes exceed its present production capacity of 360,000 units per annum, and that there is an existing plan to enhance capacity through internal accruals.

The agreement is legally binding for five years starting 25 February 2026. Payment terms include 20% advance and the balance through an irrevocable Letter of Credit payable within 30 days from invoice issuance. Pricing indexed to the London Metal Exchange suggests partial insulation against raw material price volatility.

Commencement of serial supplies from April 2026 indicates revenue visibility beginning FY27, subject to execution timelines and capacity ramp-up.

Broader Market and Sectoral Context

On 26 February 2026, benchmark indices were trading mixed in morning trade, with defence and engineering counters witnessing selective buying interest. The sharp move in Balu Forge positioned it among the notable gainers in the small-cap industrial and defence-linked segment during the session.

The announcement comes amid sustained policy focus on defence indigenisation and export-led growth in the aerospace and ammunition value chain, which has supported investor interest in companies with confirmed defence supply contracts.

About the Company

Balu Forge Industries Limited is an Indian precision engineering company engaged in the manufacturing of forged and machined components. Its product portfolio spans automotive, industrial vehicles, earthmoving equipment, aerospace, defence, oil and gas, railways, marine, and agriculture segments.

The company operates integrated forging and machining facilities at its Belgaum, Karnataka campus and has been expanding its defence manufacturing capabilities, including the commercialisation of its empty shell line and integration into global supply chains.

Conclusion

Balu Forge Industries shares advanced 8.69% in trade on February 26, 2026 so far after the company announced a five-year MoU for the supply of large calibre ammunition shells to a NATO-affiliated entity. The agreement outlines fixed volumes, indexed pricing, defined payment terms, and a phased supply schedule beginning April 2026. With disclosed quantities exceeding current installed capacity, the company has indicated plans for expansion through internal accruals, providing visibility on execution-linked developments over the contract tenure.

Source:

• https://nsearchives.nseindia.com/corporate/BALUFORGE_26022026093759_PressRelease.pdf
• https://www.nseindia.com/get-quote/equity/BALUFORGE/Balu-Forge-Industries-Limited