After years of backroom deliberations, two state-owned Israeli defense giants may soon pull the trigger on going public in a bid to capitalize on the surging global demand for defense stocks.
But challenges remain, including how the Israeli government, which currently owns both firms — Rafael and Israel Aerospace Industries — would handle concerns over state secrets and union interests, as well as what the terms of an initial public offering would look like.
“The Defense market is booming all over the world and especially in Israel. If you want to go for an IPO with Rafael and IAI, this is the time,” said Yaacov Ayish, senior vice president for Israeli affairs at the Jewish Institute for National Security of America (JINSA) and an IDF general in the reserves. “IAI is very into it in the last two years. In terms of being ready, they are more ready than Rafael. The opportunity is the same with both of them.”
The possibility of an IPO, which experts say has been privately mulled for some time, was floated publicly in March 2025, when IAI CEO Boaz Levy held a meeting with journalists in which he expressed his desire to see the company go public. Flush with a $25 billion order backlog and record sales, Levy told the press that in prior deliberations, the Israeli state had considered an IPO that would sell off a large chunk of the government stake in the company.
