Shares of companies engaged in defence manufacturing surged on Monday after the government hiked foreign direct investment (FDI) limit under the automatic route from 49 percent to 74 percent as a part of the economic stimulus package announced to help the economy during the COVID-19 crisis.
Major defence stocks rose up to 10 percent in intra-day deals. HAL surged 10 percent to Rs 576 per share, while BEL added 5.5 percent to Rs 71.50 per share on the BSE. BEML was also up 5.3 percent to Rs 630 per share and Bharat Dynamics advanced 4.7 percent to Rs 250.90 per share.
Bharat Forge, Astra Microwave Products and Walchandnagar Industries from the private sector were up between 3 percent and 5 percent, as compared to a 3 percent or 958 points decline in the S&P BSE Sensex.
The increase in the FDI limit was a part of the structural reforms announced by Finance Minister Nirmala Sitharaman under the five tranches of the overall Rs 20 lakh crore stimulus. The reform is likely to boost the government's Make in India campaign in the defence sector.
She also said the government will ban imports of some weapons to promote indigenous production. In a press conference, she added that a list of weapons/platforms will be notified for the import ban. She also added that the government is looking to improve autonomy and accountability in ordinance.
First Published: May 18, 2020 11:57 AM IST
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