Paras Defence and Space Technologies’ shares rose 10% in early morning trading on Tuesday, January 7, after the business announced that it had been awarded a license under the Arms Act of 1959.
The business stated in an exchange filing that this license allows Paras Defence to manufacture MK-46 and MK-48 Belt-fed Light Machine Guns (LMG)—modernized, enhanced, and redefined LMG—with a targeted annual capacity of 6000 units each.
The license was awarded by the Ministry of Commerce and Industry’s Department for Industry Promotion and Internal Trade.
It is valid for a lifetime and is expected to have a substantial impact on the company’s manufacturing capacity.
Stock Price Impact
Following the announcement, Paras Defence’s share price increased by 9.99 per cent to ₹1,066.50 per share, which is its upper price band. Paras Defence’s share price began at ₹960.65, significantly lower than the previous close of ₹969.55.
However, upon the announcement of the license approval, the stock rallied quickly. As of 10.05 am, Paras Defence’s share price was trading 6.8 per cent higher at ₹1,035.30.
Despite today’s price increase, Paras Defence stock is still 49% below its 52-week high of ₹1,592.75. However, from its 52-week low of ₹608.75, the stock has increased 75%.
The stock is down 8% in the previous month and 33% in the last six months. However, in the last year, it has climbed by 32%.
Business Updates
The company has announced the opening of its advanced, cutting-edge optical systems testing centre in Navi Mumbai, Maharashtra, by the end of November.
In addition, ICRA upgraded the company’s outlook that month. The credit rating agency renewed Paras Defence and Space Technologies’ long-term and short-term ratings, changing the outlook from “negative” to “stable”.
In November, the business received a ₹61.43 crore order from the Ministry of Defence to improve its Optronic Periscope Sight with Accessories, including ESM Warner, for the Indian Naval Submarine application.
