Balu Forge Signs 5-Year MOU for Large Caliber Ammunition Supply
Filing Summary
Balu Forge Industries Ltd has executed a Memorandum of Understanding (MOU) for the supply of empty shells from its Belgaum, Karnataka facility. The agreement spans five years, covering large caliber ammunition, including 155 mm M107 and 152 mm variants. The company plans to produce 30,000 units of 155 mm M107 and 10,000 units of 152 mm monthly. Pricing is set at USD 315 per unit, indexed to the London Metal Exchange. The agreement involves a NATO-affiliated entity, with supplies commencing in April 2026.
Balu Forge Industries Ltd has entered into a Memorandum of Understanding (MOU) for the supply of empty shells from its greenfield manufacturing campus in Belgaum, Karnataka. The agreement is for a period of five years and involves the supply of large caliber ammunition. This development follows the company’s integration into the NATO supply chain and the commercialization of its empty shell production line.
The financial terms of the agreement specify a pricing of USD 315 per unit for both the 155 mm M107 and 152 mm shells. The pricing is indexed to the London Metal Exchange to account for any fluctuations, ensuring protection for both the buyer and seller. Payment terms include a 20% advance, with the remaining balance payable via an irrevocable Letter of Credit within 30 days of invoice issuance. The terms are based on FOB Nhava Sheva.
The scope of the MOU includes the supply of 30,000 units per month of 155 mm M107 shells and 10,000 units per month of 152 mm shells, both in ‘Ready to Fill’ condition. The agreement covers the complete large caliber ammunition category, starting with 155 mm M107, 152 mm, and 155 mm ERFB/BT variants, with plans to extend to 105 mm, 120 mm, and 81 mm calibers. The current production capacity of 360,000 units per annum is set to increase through internal accruals to meet the agreement’s demands.
The MOU is legally binding and has been signed with a NATO-affiliated entity. Due to confidentiality and the sensitive nature of the supplies, the end user’s name has not been disclosed. The commencement of supplies is scheduled for April 2026, starting with the 155 mm M107 and 152 mm variants. The agreement includes provisions for adding the extended range variant, 155 mm ERFB BB/BT, following trials and approval.
Balu Forge Industries Ltd, founded by Mr. Prehlad Singh Chandock, is a leading precision engineering company in India. It manufactures forged and machined components for various global industries, including automotive, aerospace, and defense. The company operates advanced manufacturing facilities in Belgaum, Karnataka, and focuses on expanding its defense production capabilities, enhancing automation, and strengthening global partnerships.