Anindita Nayak
Bhubaneswar, June 5
Shares of defense-related companies dropped by up to 15% on June 4 as investors hurried to secure partial profits following the fractured mandate given to BJP-led NDA in the 2024 elections.
Defense stocks have been the favourites of investors as the Indian government focused on ‘Make in India’ in defence manufacturing space to make the country self-reliant. Under the ‘Atmanirbhar Bharat’ initiative, more investment outlays have been done for PSU defence companies. Even participation of private companies has been pursued to make India a vibrant defence manufacturing complex.
In the past year, defense stocks such as Bharat Dynamics, Bharat Electronics, Hindustan Aeronautics, Mazagaon Dock Shipbuilders, and Cochin Shipyard have more than doubled in price. As the broader market tanked around 6% on Tuesday, defence stocks came under selling pressure.
Bharat Electronics’ shares were the most affected in the defense sector, as they plunged more than 19% to close at Rs 255.55 on NSE. Similarly, shares of Bharat Dynamics fell 10% to close at Rs 1,436.85 on Tuesday.
The maker of Tejas aircraft, Hindustan Aeronautics tanked 17% to Rs 4,368 per share as investors booked profits. Mazagon Dock Shipbuilders plunged 16.20% to reach at Rs 2,729.90 on Tuesday. Similarly, Cochin Shipyard also closed 10% down to Rs 1,811.70 per share.
Shares of Hindustan Aeronautics, Bharat Dynamics, and Bharat Electronics surged nearly 10% and reached their highest levels ever in the last trading session. This happened because exit polls suggested that the BJP-led NDA was likely to come back to power, ensuring that the current government’s policies would continue. Brokerages predicted that the defense industry would be a significant winner with the BJP’s comeback.
