BHEL, Mishra Dhatu Nigam and MTAR Technologies rise, BEML, L&T dip after Centre amends space sector FDI policy

FDI in space BHEL, Mishra Dhatu Nigam, and MTAR Technologies shares were trading higher, while Larsen & Toubro and BEML stocks were down on BSE on Thursday (February 22, 2024) after the central government amended the FDI policy in the space sector. 

The Cabinet on Wednesday approved up to 49 per cent of foreign direct investment (FDI) in spacecraft launch vehicles.

"Now, the satellites sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector," the government said in a statement on Wednesday.

In the satellite manufacturing and operation sector, 74 per cent of FDI has been approved. 

FDI in Indian space sector

• The government introduced the policy in 2023. It has now changed the policy.
• The central government has liberalised FDI in prescribed sub-sectors/activities of the space sector.
• The space sector will benefit from FDI.
• A 49 per cent FDI is allowed in spacecraft launch vehicles.
• The government's approval was required for more than 49 per cent FDI.
• Now, FDI of up to 74 per cent has been approved in satellite manufacturing and operations.
• Centre's approval is required for more than 74 per cent FDI.
• Up to 100 per cent FDI has been approved for satellite sub-systems and manufacturing components.

As the government decides to amend FDI rules in the space sector, here's a look at how related stocks are faring and are expected to fare in the coming days. 

MTAR Tech

The stock of MTAR Tech soared as high as 8.65 per cent to the day's high of Rs 2065.00.

The space sector contributes 11 per cent of the Q3 order book. 

The company has an order book of Rs 1,179 crore.

The space sector has contributed 35–40 per cent to the company's annual income in the last 3 years.

Apollo Micro Systems 

The stock of the company that makes products for space and aerospace jumped by 4.75 per cent to the day's high of Rs 128.95 on Thursday.

The firm also works in the satellite space system as it makes space applications.

It has a 2.5 lakh sq ft manufacturing plant.

Azad Engineering

The company's 18 per cent income comes from the aerospace business, while the rest, 82 per cent comes from energy.

Azad Engineering's stock rose by 4.04 per cent to the day's high of Rs 1204.50.

The company's revenue from the aerospace business grew by 3X in the third quarter.

It says that the contribution of aerospace will increase in the upcoming quarter.

Azad Engineering has a 20,000 sq mts manufacturing plant.

BEML

The defence and aerospace business contributes 23 per cent to BEML's total business.

The company manufactures rocket motor casings, airborne assemblies, and BMP transmissions. 

The stock of this mid-cap company traded in negative territory.

The stock, which opened at Rs 3008.50 in the morning session on Thursday, slipped to the day's low of Rs 2884.85.

Larsen & Toubro Ltd

Larsen and Toubro slipped in morning deals as it was trading lower by 0.19 per cent, or Rs 6.20, at Rs 3290.15.

BHEL

The stock of the PSU was trading up by 1.69 per cent, or Rs 3.75, at Rs 225.75. The day's high for the stock is Rs 226.70.

Mishra Dhatu Nigam 

The stock of the company soared by 8.88 per cent, or Rs 35.90, at Rs 440.10 in morning deals. It touched the day's high of Rs 443.20.