N-deal success puts engg stocks in play

Shares of capital goods companies soared on hopes that these firms would bag lucrative contracts as a result of the breakthrough achieved in the India-US nuclear deal talks. ABB, Siemens, Bhel, L&T gained 3-7 %.

Although India now needs to sign an additional protocol with the International Atomic Energy Agency, get the approval of the 45-nation Nuclear Suppliers Group and wait for an approval from the US congress, punters are betting that all these engineering companies will get equipment orders from the government for nuclear power generation.

They seem to have forgotten that as per law, for companies to qualify for orders on nuclear projects, the government should hold more than 51% in those companies. As of now only NTPC and Nuclear Power Corporation (NPC) fit this criterion. While NPC is not yet listed, NTPC gained 3% on Monday to close at Rs 158.