3 Paras Defence promoters sell stakes as multibagger stock doubles since March 3

Defence stock: Paras Defence promoters were seen trimming stakes in the defence manufacturer via bulk deals on Monday, after the stock more than doubled from March 3 closing level of Rs 834.95 apiece. 
As per NSE data, Sharad Virji Shah sold 9,00,000 Zen Tech shares at Rs 1,682.87 apiece. Anish Mehta offloaded 2,17,159 shares while Kaajal Bhansali sold 2,17,049 shares each at a price of Rs 1,664.62 and 1,662.62, respectively.

Sharad Virji Shah held 18.05 per cent in Paras Defence as of March 31, while Anish and Kaajal owned 3.53 per cent stake each in the defence maker, with the total promoter stake standing at 57.05 per cent. 

The three individuals, who are a part of promoter group sold 13.34 lakh shares in total, accounting for 5.8 per cent of the total promoter shareholding, and 3.3 per cent of the total outstanding shares of the defence maker.

The defence maker came out with an IPO its in September 2021. The issue price was Rs 175 apiece. On Monday, the scrip closed at Rs 1.707.70, after hitting a record high of Rs 1,943.60 apiece.   
The multibagger stock has jumped 106 per cent from March 6 closing of Rs 834.95. The stock is leading the defence pack in the terms of returns in the past three months. 

Indian defence stocks are in focus of late, as the strong domestic defence manufacturing capability was displayed in Operation Sindoor, following which PM Narendra Modi emphasised the need for greater military self-reliance, stating that India has demonstrated its strength in modern warfare and should now take the lead in defence innovation through indigenous technology.

Analysts are however mixed over how to approach the defence pocket, following the recent surge. They suggested traders to have a clear exit strategy for these momentum plays. 

Vijayakumar, Chief Investment Strategist at Geojit Investments  said even though the defence segment has bright medium to long-term prospects, their valuations have become excessive and , therefore, investors have to be extremely cautious. "Some profit booking in this segment would be appropriate," he said.

Kotak Institutional Equities said the stock market was again in the grips of irrational exuberance with the market quick to discount any half-baked narrative -- defense being the latest one. 

"The market’s recurring tendency to buy into narratives is astonishing given the history of narratives. Many had emerged and collapsed in the past 2-3 years," it said.

Ajit Mishra – SVP, Research, Religare Broking said thematic plays like defense have shown exceptional performance in recent weeks and may continue to offer opportunities. 

"However, traders should maintain a disciplined approach, including clear exit strategies while pursuing momentum trades, and avoid taking contrarian positions without strong supporting," he said.