Shares of Paras Defence and Space Technologies Ltd witnessed a sharp uptick during Friday's trading session, climbing as much as 4% to an intraday high of ₹698.20. This surge in the Paras Defence share price came on the back of the company's announcement regarding the proposed divestment of its majority holding in subsidiary Ayatti Innovative Private Limited.
Details of the Ayatti Innovative Stake Sale
In a regulatory filing to the stock exchanges, the defence and aerospace solutions provider disclosed its plan to sell its entire 58.02% equity stake in Ayatti Innovative. This stake comprises 15,20,000 equity shares, each with a face value of ₹10. The company stated that the divestment process is expected to be finalized on or before December 31, 2025, contingent upon the completion of due diligence by prospective buyers.
"In continuation of our earlier intimation dated March 28, 2025, we wish to inform you about the status of the proposed divestment of the Company’s equity stake in its subsidiary, Ayatti Innovative Private Limited," Paras Defence said in the filing. The company added that the due diligence exercise is currently underway and is taking additional time. Upon completion of the transaction, Ayatti Innovative will cease to be a subsidiary of Paras Defence.
Strong Quarterly Performance Underpins Sentiment
The divestment news follows a robust financial performance by the company for the second quarter of the fiscal year 2025. Paras Defence reported a 50% year-on-year jump in net profit, which soared to ₹21 crore from ₹14 crore in the same quarter last year.
The company's revenue also saw significant growth, increasing by 21.8% YoY to ₹106 crore. This growth was propelled by solid execution across its core business segments, which include optics, defence electronics, and space engineering. Operational efficiency improved markedly, with EBITDA rising 32% to ₹30 crore from ₹22.7 crore a year ago, reflecting tighter cost management.
Paras Defence Share Price: A Volatile Multibagger
The defence stock opened at ₹674 on Friday, higher than its previous close of ₹670.90 on Wednesday. The stock has been riding a wave of positive market sentiment, gaining nearly 11.31% in the past five sessions. However, the stock has exhibited considerable near-term volatility.
Over a six-month period, the Paras Defence share price has declined by 13.56%. In contrast, it has delivered impressive returns of 41% over the last one year and a staggering 184% over the past five years, cementing its status as a multibagger. The stock, listed on both BSE and NSE, hit its 52-week high of ₹971.80 on May 19 and a 52-week low of ₹401 on April 4.
Market analysts note that the divestment of the non-core subsidiary is likely to streamline Paras Defence's business focus and could unlock value. However, they also caution that such corporate actions typically induce short-term volatility in the share price as the market digests the implications and awaits the final terms of the deal.
