Why Paras Defence stock rose 20% today

Shares of Paras Defence and Space Technologies zoomed 20 per cent today after the firm said its board had approved incorporation of a company in association with Krasny Defence Technologies for maintenance, servicing & repairs of defence equipment and naval vessels.

The stock also saw positive sentiment after shifting to the rolling segment from T2T segment with effect from today.

Stock of Paras Defence and Space Technologies opened 2.64 per cent higher at Rs 650 against previous close of Rs 633.25 on the Bombay Stock Exchange (BSE). Later, the share was stuck in the upper circuit of 20 per cent in the afternoon session.

Market cap of the firm rose to Rs 2,963.61 crore on BSE. Total 8.23 lakh shares of the firm changed hands amounting to turnover of Rs 57.65 crore on BSE.

The stock closed 20 per cent higher at Rs 759.90.

On National Stock Exchange (NSE) too, the stock ended 20 per cent higher at Rs 750.35 against previous close for Rs 625.30. It opened at Rs 643.90.

"The board at its meeting held today approved incorporation of an associate company in association with Krasny Defence Technologies, who is a prominent player in the field defence equipment maintenance and wholesome refits of Indian Naval and Indian Coast Guard Ships (ICGS). The proposed associate company shall be engaged in the field of maintenance, servicing and repairs of defence equipments and naval vessels," said the company in an exchange filing.

The incorporation of the entity is subject to the approval of the MCA and such other statutory authorities.

In a notice dated October 1, 2021, the firm said, "The trading in the equity shares of Paras Defence and Space Technologies shall be transferred from Trade for Trade segment (T Group) to Rolling segment with effect from Monday, October 18, 2021. Accordingly, the dealings in the equity shares of the company will be shifted under B Group.".

In the T2T segment, each trade has to result in delivery and no intra-day netting of positions is allowed.

Shares of Paras Defence and Space Technologies made a strong market debut on October 1, listing at 171 per cent premium to the issue price.

Paras Defence stock listed at Rs 475 per share on the BSE against the IPO issue price of Rs 175. Price band of the IPO was fixed at Rs 165-175 per share.

Market cap of the firm rose to Rs 1,945.13 crore.

The IPO was open for subscription from September 21-23.

On NSE, the share opened at Rs 469.

Market cap of the firm rose to Rs 1,920 crore.

Paras Defence and Space Technologies is engaged in designing, developing, manufacturing, and testing a wide range of defence and space engineering products and solutions.

The company's business is highly dependent on projects and programmes that are undertaken by the central government and associated entities, such as defence public sector undertakings and government organisations involved in space research.