Defence stocks in limelight; zoom up to 10 pc
New Delhi: Shares of companies related to the defense sector zoomed up to 10 percent in early trade on Monday after the government said it will relax foreign direct investment norms in defense manufacturing by allowing 74 percent FDI under the automatic route.
Bucking the overall weak broader market trend, shares of Hindustan Aeronautics jumped 10 percent, Bharat Electronics rose 5.53 percent, BEML advanced 5.31 percent, Astra Microwave Products surged 4.93 percent and Bharat Dynamics was trading up 4.71 percent on the BSE.
The government on Saturday said it will relax foreign direct investment norms in defense manufacturing by allowing 74 percent FDI under the automatic route with a view to attracting overseas players in the sector.
As per the current FDI policy, 100 percent overseas investments are permitted in the defense industry -- 49 percent under the automatic route, while beyond that government approval is required.
Finance Minister Nirmala Sitharaman said the FDI limit for the sector under automatic route will be raised from 49 percent to 74 percent.
"It will have security clearance and everything else as always," she said while announcing the fourth tranche of the Rs 20 lakh crore stimulus package for the coronavirus-hit economy.
Meanwhile, the BSE 30-share index was trading 775.78 points or 2.49 percent lower at 30,321.95 in early trade.
