Paras Defence shares soar 10%, hit upper circuit on receiving license to manufacture MK-46 and MK-48 machine guns

Stock market today: Shares of Paras Defence and Space Technologies surged 10 per cent in the early morning trade on Tuesday, January 7 after the company said it has been granted a License under the Arms Act, 1959.

The company informed via an exchange filing that this license authorises Paras Defence to manufacture MK-46 and MK-48 Belt-fed Light Machine Guns (LMG)—modernised, Enhanced, and Redefined LMG—with a proposed annual capacity of 6000 units each.

The Department for Promotion of Industry & Internal Trade, Ministry of Commerce & Industry has granted the license. 

It is valid for a lifetime and is likely to significantly influence the company's manufacturing capabilities.

Stock Price Impact

Following the announcement, Paras Defence share price surged 9.99 per cent to ₹1,066.50 apiece, its upper price band. Paras Defence share price opened slightly lower at ₹960.65 as against the previous close of ₹969.55.

However, following the grant of license announcement, the stock rebounded sharply. As of 10.05 am, Paras Defence share price was trading 6.8 per cent higher at ₹1,035.30.

Despite today's price surge, Paras Defence stock is still down 49 per cent below the 52-week high of ₹1,592.75. However, from its 52-week low of ₹608.75, the stock has risen 75 per cent.

The stock is down 8 per cent in the past one month and 33 per cent in the past six months. However, in the last one year, it has risen 32 per cent.

Business Updates

The company recently announced the opening of its advanced, state-of-the-art optical systems testing facility in Navi Mumbai, Maharashtra towards the end of November. 

The company also received an outlook upgrade that month from ICRA. The credit rating agency reaffirmed the ratings for the long-term and short-term facilities of Paras Defence and Space Technologies and changed the outlook from “Negative” to “Stable”.

Additionally, the company also received an order from the Ministry of Defence worth ₹61.43 crore for the upgrade of Optronic Periscope Sight with Accessories, including ESM Warner, for the Indian Naval Submarine application in the first half of November.

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