The Abu Dhabi Investment Authority (ADIA), the sovereign wealth fund of the United Arab Emirates, acquired a 1.44% stake in Paras Defence and Space Technologies (PDST) on Friday, June 14th, 2024. This strategic investment, revealed through NSE bulk deal data, has sparked significant interest in the Indian defence sector.
PDST, a private sector company specializing in the design, development, manufacturing, and testing of defence and space engineering products, has been experiencing substantial growth. The company's strong financial outlook, with projected annual revenue increases of 25% to 30%, likely attracted ADIA's attention.
The Indian government's emphasis on self-reliance in defence equipment has created a favorable market for domestic companies like PDST. ADIA's investment may be a strategic move to capitalize on this growing market and PDST's expertise in space engineering, a field with increasing importance in defence applications.
Following the news of ADIA's acquisition, PDST's shares surged. On Friday, June 14th, the shares gained 20%, reaching a year-high of ₹1,156.9 apiece on the NSE. The upward trend continued, with the stock price hitting a fresh 52-week high of ₹1,388.25 per share on Tuesday, June 18th, in a block deal worth around ₹229 crore.
In the five trading days since June 10th, PDST's shares have risen by approximately 58%. The company clarified that this surge is purely market-driven and attributed to market conditions, with no pending announcements or information that could impact the stock's performance.
This investment by ADIA underscores the growing appeal of the Indian defence sector to foreign investors. As the government continues to prioritize self-reliance in defence, companies like PDST are poised to benefit from increased demand and potential collaborations with international players.
