Pipavav Defence is amongst the top gainers on the BSE today, currently up over 3.5% at Rs.70.80, with an intra day high at Rs.71.50. Volumes remain muted at around 33,000 shares.

The stock has zoomed into the green after the Govt yesterday hiked FDI in 13 sectors, through automatic and FIPB approval route. In defence, the FDI cap has been retained at 26% at the behest of the Defence Minister  though the Govt was up for 74%. While retaining the limit at 26%, the Govt has stated that cap can be raised, on a case-to-case basis,  for proposals involving advanced technology. This too, will have to be first approved by the Cabinet Committee on Security.

Defence Minister, Mr.Anthony is of the opinion that  after the Agusta Westland chopper scam, priority should be given to development of indigenous weapons. In fact India’s procurement policy too has been changed to local industry and imports would be the last option. This is good for domestic companies like Pipavav which develops defence systems. The other factor which stands in favour of the company is that the Defence Ministry cleared the much delayed the Mazagon Dock-Pipavav Defence joint venture to build warships for the Indian Navy.