Top Defence and Aerospace Stocks With FIIs Raising Their Stakes in Q1 FY27

Foreign Institutional Investors (FIIs) increased their holdings in several Indian defence and aerospace companies during Q1 FY27, highlighting growing institutional confidence in the sector. The increased investments come as India's defence manufacturing industry continues to benefit from higher government spending, rising exports, the Make in India initiative, and strong order inflows from the armed forces and defence public sector undertakings (PSUs).

FII shareholding is widely tracked by investors as it often reflects long-term institutional conviction. Companies witnessing higher foreign ownership generally attract greater market attention due to expectations of sustained earnings growth, expanding order books, and improving business fundamentals.

Here are the Top 5 defence and aerospace stocks where FIIs increased their stake during the June 2026 quarter.

Top 5 Defence Stocks With Rising FII Holdings

Company	Market Cap	Q4 FY26 FII Holding	Q1 FY27 FII Holding	Increase
IdeaForge Technology	₹4,194 crore	0.73%	4.89%	+4.16%
Paras Defence & Space Technologies	₹9,484 crore	5.06%	8.29%	+3.23%
Astra Microwave Products	₹16,358 crore	7.56%	10.74%	+3.18%
Avantel	₹4,518 crore	0.55%	1.54%	+0.99%
Krishna Defence & Allied Industries	₹1,917 crore	0.61%	1.36%	+0.75%

1. IdeaForge Technology Ltd

IdeaForge Technology is one of India's leading drone and unmanned aerial vehicle (UAV) manufacturers, supplying advanced drone solutions for defence, homeland security, surveillance, mapping, and industrial applications. The company serves the Indian Armed Forces, government agencies, and enterprise customers with indigenous drone technologies.

Foreign institutional investors significantly increased their stake from 0.73% in Q4 FY26 to 4.89% in Q1 FY27, marking the largest increase among the companies on this list.

Particular	Details
Company	IdeaForge Technology Ltd
Market Capitalisation	₹4,194 crore
Share Price	₹844.15
Q4 FY26 FII Holding	0.73%
Q1 FY27 FII Holding	4.89%

2. Paras Defence & Space Technologies Ltd

Paras Defence & Space Technologies operates across defence electronics, optics, optronics, defence software, EMP protection systems, and heavy engineering. The company supplies products to DRDO, ISRO, the Indian Armed Forces, and several private defence manufacturers.

FIIs raised their ownership from 5.06% to 8.29% during Q1 FY27, reflecting continued institutional interest in India's defence electronics and space manufacturing ecosystem.

Particular	Details
Company	Paras Defence & Space Technologies Ltd
Market Capitalisation	₹9,484 crore
Share Price	₹1,176.90
Q4 FY26 FII Holding	5.06%
Q1 FY27 FII Holding	8.29%

3. Astra Microwave Products Ltd

Astra Microwave Products is among India's leading manufacturers of RF and microwave systems, supplying mission-critical communication equipment to DRDO, ISRO, defence PSUs, and the Indian Armed Forces. The company also serves the telecom and space sectors.

Foreign investors increased their shareholding from 7.56% in Q4 FY26 to 10.74% in Q1 FY27, making it one of the highest FII-owned companies within the defence electronics space.

Particular	Details
Company	Astra Microwave Products Ltd
Market Capitalisation	₹16,358 crore
Share Price	₹1,722.95
Q4 FY26 FII Holding	7.56%
Q1 FY27 FII Holding	10.74%

4. Avantel Ltd

Avantel develops advanced wireless communication, satellite communication, software-defined radio, and network management solutions for defence and aerospace applications. Its customers include the Indian Navy, DRDO, ISRO, and other government agencies.

FII ownership increased from 0.55% to 1.54% during the June quarter, indicating growing institutional confidence in the company's communication technology business.

Particular	Details
Company	Avantel Ltd
Market Capitalisation	₹4,518 crore
Share Price	₹170.05
Q4 FY26 FII Holding	0.55%
Q1 FY27 FII Holding	1.54%

5. Krishna Defence & Allied Industries Ltd

Krishna Defence & Allied Industries manufactures specialised defence equipment including defence shelters, aircraft arresting systems, composite products, and engineering solutions. The company focuses on indigenous defence manufacturing and import substitution.

FIIs increased their stake from 0.61% in Q4 FY26 to 1.36% in Q1 FY27, reflecting rising interest in niche defence manufacturing companies.

Particular	Details
Company	Krishna Defence & Allied Industries Ltd
Market Capitalisation	₹1,917 crore
Share Price	₹1,283
Q4 FY26 FII Holding	0.61%
Q1 FY27 FII Holding	1.36%

FII Holding Comparison

Company	Increase in FII Holding
IdeaForge Technology	+4.16%
Paras Defence & Space	+3.23%
Astra Microwave Products	+3.18%
Avantel	+0.99%
Krishna Defence	+0.75%

Why FIIs Are Increasing Exposure to Defence Stocks

The Indian defence sector has emerged as one of the fastest-growing manufacturing industries, supported by favourable government policies and increasing defence capital expenditure.

Key growth drivers include:

Growth Driver	Impact
Higher Defence Budget	Increased procurement opportunities
Make in India	Boost to domestic manufacturers
Defence Exports	Expanding global market access
Import Substitution	Reduced dependence on imports
Space & Drone Programs	New growth opportunities
Private Sector Participation	Larger addressable market

The government's continued emphasis on indigenous defence manufacturing and advanced technology platforms is expected to support long-term sector growth.

What It Means for Investors

An increase in FII shareholding does not guarantee future stock performance, but it often signals that institutional investors see improving long-term fundamentals. Defence companies continue to benefit from robust order books, policy support, rising exports, and increasing investments in drones, aerospace, electronic warfare, communication systems, and next-generation defence technologies.

Investors should continue monitoring quarterly shareholding patterns, order inflows, execution capabilities, and earnings growth before making investment decisions.

1. Which defence stock saw the highest increase in FII holding during Q1 FY27?

IdeaForge Technology recorded the largest increase, with FII ownership rising from 0.73% to 4.89%.

2. Why are FIIs investing in defence companies?

FIIs are increasing exposure due to strong government support, rising defence spending, growing exports, robust order books, and India's focus on indigenous defence manufacturing.

3. Which company has the highest FII ownership among these five stocks?

Astra Microwave Products has the highest FII holding at 10.74% as of Q1 FY27.

4. Which sectors do these companies operate in?

The companies operate across defence electronics, drones, aerospace, satellite communication, RF systems, microwave technology, defence engineering, and secure communication solutions.

5. Does rising FII ownership guarantee higher stock returns?

No. Rising FII ownership reflects institutional interest but should be evaluated alongside company fundamentals, earnings growth, valuations, and execution performance.