Bharat Heavy Electricals Limited (BHEL) shares fell 9% on concerns that India might lift a ban on Chinese firms bidding for government contracts, intensifying competition. The news impacted the broader capital goods sector.
Bharat Heavy Electricals Limited (BHEL) witnessed a sharp sell-off on Thursday, with its shares tumbling close to 9 per cent, as panic swept through the domestic stock market following fears of a possible 500 per cent tariff threat from the United States. The broader market remained under heavy pressure through the day, with selling seen across sectors and all major indices ending in the red.
China policy buzz spooks investors
The biggest trigger behind the sudden fall in BHEL was a report suggesting that the finance ministry is considering lifting a five-year-old restriction on Chinese companies bidding for government contracts. The move, if implemented, could open the doors for Chinese firms to re-enter the public procurement space, intensifying competition for domestic capital goods players.
This sparked worries among investors over potential pricing pressure and margin erosion for companies like BHEL, which plays a major role in India's power, infrastructure, transportation, defence and industrial sectors, and is also active in emerging areas such as EV charging infrastructure.
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Capital goods stocks bleed across the board
The sell-off was not limited to BHEL. Several heavyweights in the capital goods space closed deep in the red. Hitachi Energy India slumped nearly 6 per cent, ABB India fell close to 5 per cent, Inox Wind declined over 4 per cent, Siemens dropped around 4 per cent, while Suzlon Energy, Titagarh Rail Systems and Larsen & Toubro also lost more than 3 per cent each.
Reflecting the sector-wide pressure, the BSE Capital Goods index slid 2.31 per cent to 66,267.65, PTI reported.
Rs 5,400 crore order brings some relief
Despite the brutal fall, BHEL shares are expected to remain in focus on Friday after the state-owned engineering major announced a significant order win worth around Rs 5,400 crore, excluding GST, from Bharat Coal Gasification and Chemicals Limited (BCGCL) for a coal-to-ammonium nitrate project in Jharsuguda, Odisha.
BCGCL is a joint venture between BHEL and Coal India Limited. The contract covers engineering, procurement, construction, commissioning and performance guarantee of coal gasification and raw syngas cleaning facilities, which form the core of the integrated chemical complex.
The scope of work includes setting up the gasifier and its auxiliaries, a steam generation plant, air separation unit, coal and ash handling systems and cooling tower facilities.
Vande Bharat supply adds to positive cues
Adding to the positive developments, BHEL also informed exchanges that it has started supplying semi-high-speed underslung traction converters for Vande Bharat sleeper trains. The first set of converters was flagged off from the company's Bengaluru plant and is being dispatched to Kolkata for final assembly of the trains.
The ceremony was attended by senior officials, including BHEL Director (IS&P) Bani Varma, highlighting the PSU's growing role in India's indigenous rail manufacturing push.
