Defence-related stocks saw a significant fall on May 20, extending losses for a second consecutive session as investors resorted to profit booking after the recent record run.
The sharp fall in the share prices pushed the Nifty Defence India index down nearly 2.4 percent to end the session at 8,009.70.
Paras Defence shares tumbled nearly 7 percent after its promoters sold as much as 3.3 percent stake in the company. This comes after the stock had rallied nearly 55 percent in the past one month.
According to data available on the NSE, the company's promoter Sharad Virji Shah sold 9 lakh shares at Rs 1,682.87 apiece. Anish Mehta sold 2.17 lakh shares at a price of Rs 1,664.62 apiece, while Kaajal Harsh Bhansali sold 2.17 lakh shares at Rs 1,662.62 apiece. Hence, the promoters cumulatively sold 13.34 lakh shares of the company in large bulk deals.
As of March 2025, promoters of the company held 57.05 percent stake in the company, while general public held the rest of the 42.95 percent stake.
Cochin Shipyard shares crashed 8 percent to trade at Rs 1,824 apiece. Data Patterns shares fell over 5 percent, while BEML, DCX India and Garden Reach Shipbuilders and Engineers (GRSE) shares plunged around 4 percent each.
Hindustan Aeronautics (HAL) shares dropped over 3 percent, while Bharat Dynamics (BDL), Mazagon Dock Shipbuilders and Cyient DLM shares dropped around 2 percent each.
Zen Technologies and Bharat Electronics (BEL) shares however bucked the trend to trade in the green with marginal gains.
The defence stocks had seen an extended run earlier this month following heightened border tensions between India and Pakistan in the aftermath of 'Operation Sindoor'. The shares extended gains for six consecutive sessions till May 16, pushing the combined market capitalisation of 18 listed defence companies to a whopping Rs 11.23 lakh crore. This marked a significant jump of 50 percent from the February low of Rs 6.95 lakh crore.
"An important trend in the market is the sharp rally in defence stocks. Even though this 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," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
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