Shares of GOCL Corporation jumped 14 percent as promoter Hinduja Capital, Mauritius, plans to to lower its stake by about 1 percent either through a bulk deal or a block deal.
After the dilution, the promoter holding will come down to about 72.83 percent. According to the company, this stake sale will enable GOCL Corporation to obtain the necessary licences to take up and expand its business in the defence sector.
At 9.30 am, shares of the company were quoting Rs 506.3 on the NSE, higher by 13.84 percent compared to the previous session's closing price.
GOCL Corporation’s products such as precision detonators, ignitors, pyro devices for missile systems and canopy severance systems find application in the defence sector.
In 2020, Hinduja Capital Limited, Mauritius, reduced its shareholding in the company from 74.93 percent to 73.83 percent to meet the 74 percent FDI limit set for the defence sector.
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“The company has been readying itself to expand this business as the Government of India has raised the automatic route limit for FDI in the defence sector to 74 percent,” the company had said in a filing with the bourses back in 2020.
The automatic route means the entry route through which investment by a person residing outside India does not require the prior approval of the Reserve Bank of India or the central government.
Over the past six months, the shares of the company have risen around 6.5 percent, underperforming the frontline index Nifty 50 that has gained around 14 percent during the same time period.
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