Key Highlights
- Balu Forge signs 5-year MoU to supply large calibre ammunition shells to a NATO-affiliated entity.
- Agreement covers 155 mm M107 and 152 mm ammunition variants with phased expansion planned.
- Monthly supply commitment includes 30,000 units of 155 mm and 10,000 units of 152 mm shells.
- Pricing fixed at USD 315 per unit indexed to London Metal Exchange benchmarks.
- Supplies to commence from April 2026 from Belgaum greenfield manufacturing facility.
- Company plans capacity expansion beyond 360,000 units annually through internal accruals.
Balu Forge Industries Limited has announced the execution of a five-year Memorandum of Understanding (MoU) for the supply of large calibre ammunition empty shells from its greenfield manufacturing facility in Belgaum, Karnataka. The agreement marks a significant step in the company’s expansion into the defence consumables segment and strengthens its position in the global defence supply chain.
The company stated that the MoU follows its onboarding into the NATO supply ecosystem and commercialization of its empty shell manufacturing line. Supplies under the agreement are scheduled to commence from April 2026 and will be ramped up in phases.
Under the terms of the agreement, Balu Forge will supply multiple categories of large calibre ammunition, including 155 mm M107 and 152 mm variants, with future expansion planned for additional calibres such as 105 mm, 120 mm and 81 mm. The contract has been signed with a NATO-affiliated entity, though the end user remains undisclosed due to confidentiality and the sensitive nature of defence supplies.
The MoU outlines monthly supply commitments of 30,000 units of 155 mm M107 shells and 10,000 units of 152 mm shells in ready-to-fill condition for a tenure of five years. These volumes exceed the company’s current manufacturing capacity, prompting plans to expand production beyond the existing annual capacity of 360,000 units through internal accruals.
Pricing for both categories has been fixed at USD 315 per unit and will remain indexed to the London Metal Exchange to account for raw material price fluctuations. Deliveries will be executed on FOB Nhava Sheva terms, while payment conditions include a 20 percent advance with the remaining amount payable through an irrevocable letter of credit within 30 days of invoice issuance.
The agreement is legally binding and became effective from February 25, 2026. Initial supplies will focus on 155 mm M107 and 152 mm ammunition variants, with extended-range versions expected to be added after trials and regulatory approvals.