Balu Forge has entered into a MoU for a period of 5 years for the supply of large caliber ammunition

Balu Forge Industries Ltd (Balu Forge or the Company) (BSE: 531112 | NSE: BALUFORGE), a precision engineering company engaged in the manufacturing of forged and machined components, has entered into a Memorandum of Understanding (M.O.U) for the supply of empty shells from the Company's greenfield manufacturing campus in Belgaum, Karnataka. This is the next phase of our journey post the onboarding onto the NATO supply chain & commercialisation of our empty shell line.

This is in line with the company's strategy to build a strong foundation in the defence consumable space starting with large calibre ammunition & will further expand towards medium & small calibre in the near future.

The said agreement covers the complete large caliber ammunition category starting with 155 mm M107, 152 mm & 155 mm ERFB/BT variants & will be extended to 105 mm, 120 mm, 81 mm amongst others.

Please kindly find below key constituents of the said Memorandum of Understanding:

Product & Quantity

155 mm M107: 30,000 units per month in 'Ready to Fill' condition for a period of 5 years

152 mm: 10,000 units per month in 'Ready to Fill' condition for a period of 5 years

- The above volumes exceed the present capacity of the company but there is already a plan in place to increase the production capacity beyond from the 360,000 per annum from internal accruals.

Pricing

155 mm M107: USD 315 per unit

152 mm: USD 315 per unit

- The said pricing will be indexed to the London Metal exchange & will be used as the basis for any fluctuation to safeguard the interests of both the buyer & seller.

- The above terms are as per FOB Nhava Sheva

Payment Terms: The payment terms agreed is 20% advance & balance will be via irrevocable Letter of Credit payable within 30 days from the issuance of the invoice.

Tenure & Nature agreement: The agreement is made for a period of 5 years starting 25th February, 2026 & is legally binding for both parties involved.

Confidentiality: The said M.O.U has been signed with a NATO affiliated entity & due to the confidentiality nature of the agreement & sensitive nature of the supplies, the name of the end user has presently not been disclosed.

Commencement of Supplies: The serial commencement of supplies will be from April, 2026 & will be ramped up in a phased manner. The initial supplies will be for 155 mm M107 & 152 mm variants only. Further to trials & approval of the extended range variant (155 mm ERFB BB/BT), these will be added as an addendum to this M.O.U.

Shares of Balu Forge Industries Ltd was last trading in BSE at Rs. 446.15 as compared to the previous close of Rs. 460.40. The total number of shares traded during the day was 36464 in over 787 trades.

The stock hit an intraday high of Rs. 467.15 and intraday low of 442.50. The net turnover during the day was Rs. 16397439.00.

Source : Equity Bulls

Keywords

BaluForgeIndustries INE011E01029 IndustrialMachinery MoU