Defence stocks in focus on rising FDI limit to 74 per cent

In today’s trading session, the stocks of defence sector are trading in green, as a result of the favourable announcement made by Finance Minister Nirmala Sitharaman on May 17.

Under this announcement, foreign direct investment (FDI) limit for defence has been increased to 74 per cent, which was earlier 49 per cent. Also, the ban has been imposed on the import of certain weapons. The government will come up with a list of the items on which the export ban has been levied.

Nirmala Sitharaman said that there will be indigenisation of some imported spares and a separate budget provisioning for domestic capital procurement will be done. This will reduce the huge defence import bill, she stated.

This move would give room to local manufacturers as the supply would be provided by them. Also, to meet such a rising demand, new manufactures would also jump in this field.

Major companies in today’s trading session are BEL-up by six per cent, Bharat Dynamics-up by five per cent, Reliance Naval and Engineering-up by five per cent, RITES Limited-up by three per cent, Solar Industries India-up by two per cent, BEML-up by five per cent.