Hitachi Energy, GE Vernova T&D, CG Power and Industrial Solutions: Heavy electrical goods makers shares fall up to 4%, here is why

Shares of heavy electrical equipment makers such as Hitachi Energy, GE Vernova T&D, CG Power and Industrial Solutions, Siemens Energy and Thermax declined for a second straight session on Friday, January 9, and tumbled up to 4% after media reports suggested that the government is planning to scrap five-year-old restrictions on Chinese firms bidding for government contracts.

Finance Ministry is planning to scrap five-year-old restrictions on Chinese firms bidding for government contracts as government seeks to revive commercial ties, news agency Reuters reported citing two government sources.

The curbs which were imposed in 2020 required Chinese companies to register with government committee and obtain political and security clearances and the measures effectively barred Chinese companies from competing for government contracts.

Following the Reuters report shares of BHEL closed 9% lower on Thursday at ₹277.

Analysts say that if approved by the government, Indian companies will face a stiff competition from their Chinese counterparts which can offer their services at steep discount.

BHEL order win

Shares of BHEL rebounded on Friday and the stock jumped as much as 4.85% to hit an intraday high of ₹285.50 after the company said that it won an order from Bharat Coal Gasification and Chemicals for coal gasification and raw syngas cleaning facilities for coal-to-ammonium nitrate project at Jharsuguda, Odisha.

Bharat Coal Gasification and Chemicals Limited (BCGCL) is a joint venture company of Bharat Heavy Electricals Limited (BHEL) and Coal India Ltd (CIL).

The order covers engineering, procurement, construction, commissioning and performance guarantee of the coal gasification and raw syngas cleaning facilities, which form the core process units of the integrated chemical complex.

As of 10:31 am, the measure of energy companies on the National Stock Exchange traded 0.17% higher at 34,788 with most of the heavy electrical equipment makers trading with a negative bias.