NIBE Ltd shares gained up to 2% in trading following a significant regulatory approval that strengthens the company's position in India's defence manufacturing sector. The aerospace and defence component manufacturer received crucial authorization from the Ministry of Home Affairs through its subsidiary.

Manufacturing License Approval

NIBE Defence and Aerospace Limited (NDAL), a subsidiary of NIBE Ltd, has secured a manufacturing license from the Ministry of Home Affairs for firearms and ammunition production. This authorization represents a strategic diversification into defence manufacturing capabilities.

Recent Defence Order

The company recently secured a substantial contract from the Indian Army, demonstrating strong order book momentum in the defence sector.

Financial Performance Challenges

Despite positive regulatory developments, NIBE Ltd faces significant operational headwinds in its recent quarterly performance. The company's Q2FY26 results reflect substantial stress across key financial metrics.

The sharp revenue decline and profitability reversal highlight significant near-term business challenges, with weak operating leverage and lower volumes contributing to the deteriorated performance.

Market Position and Stock Performance

NIBE Ltd, with a market capitalization of ₹1,742.98 crore, was trading at ₹1,201.95 per share, representing a decrease of approximately 1.80% from the previous closing price of ₹1,220.90. The company specializes in precision fabrication, structural assemblies, and complex systems for military applications, positioning itself within India's defence indigenization initiative.

The manufacturing license approval strengthens NIBE's long-term defence sector positioning despite current operational challenges, providing enhanced capabilities in firearms and ammunition production alongside its existing aerospace and defence component manufacturing operations.

Nibe Limited has announced a significant development in its defense sector expansion, with its subsidiary Nibe Defence and Aerospace Limited (NDAL) receiving approval for firearms manufacturing from the Ministry of Home Affairs. This strategic milestone marks the company's formal entry into the defense manufacturing and proof-testing sector under the provisions of the Arms Act, 1959.

License Details and Regulatory Framework

The Ministry of Home Affairs, Government of India, has granted NDAL the license for manufacturing and proof testing of firearms and ammunition under the Arms Act, 1959, Arms Rules, 2016, and related notifications. This regulatory approval enables the subsidiary to operate within the established legal framework for defense manufacturing in India.

Manufacturing Capabilities and Product Range

The license authorizes NDAL to manufacture a comprehensive range of firearms and related components, positioning the company strategically within the defense sector. The approved manufacturing scope demonstrates the subsidiary's potential to serve various defense requirements.

The license covers the following products and components:

• Pressure-bearing parts and components including barrels, slides, cylinders, bolts, breech locks, and firing pins
• 9mm Parabellum pistols and standard 9mm pistols
• Manufacturing machinery for 5.56 X45 mm firearms
• Machine guns and rifles
• Associated proof-testing equipment and systems

Strategic Impact and Implementation Timeline

This license represents a significant strategic milestone for Nibe Limited, formally establishing the company's presence in the defense manufacturing sector. The approval enables NDAL to participate in the growing defense manufacturing market and contribute to India's defense capabilities through domestic production.

Under the license terms, NDAL must establish the necessary infrastructure within a specified timeframe. The subsidiary is required to construct factory premises and set up plant and machinery within seven years of the license grant, ensuring proper implementation of the manufacturing capabilities.

Regulatory Compliance and Disclosure

Nibe Limited has fulfilled its disclosure obligations under Regulation 30 of the SEBI Listing Obligations and Disclosure Requirements Regulations, 2015, by informing both BSE Limited and National Stock Exchange of India Limited about this development. The company has provided comprehensive details about the license approval, its impact, and implementation requirements as mandated by regulatory guidelines.