The announcement of the first list of Smart Cities has given a sentimental boosted to shares of construction, cement and construction material companies.
They surged as much as 9 per cent in afternoon trade on Jan 28 after the Modi government announced the first list of 20 cities selected under the flagship Smart City project.
Reacting to the announcement, shares of construction companies such as Supreme Infrastructure, Punj Lloyd, Kaushalya, Prakash Constructions rose up to 10 per cent. Construction material firms, also, saw an upswing of as much as 5 per cent, led by Gujarat Borosil, Vertical Industries and Oriental Trimex.
Cement companies also gained on hope of a rise in demand in the regions where the Smart Cities have been proposed. Stocks of companies like Udaipur Cements, Shree Cements, Oriental Veneer Products, Ramco Cements, Burnpur Cements rose up to 5 per cent on the BSE.
Other potential beneficiaries of the government’s flagship project such as KEI International, Schneider Electrical, Smartlink Network Systems and NBCC gained up to 5 per cent after the announcement.
Many of the midcap and smallcap IT stocks also saw a surge, with Tanla Solutions, Nelco and Kellton Tech Solutions gaining as much as 10 per cent.
The government has allocated Rs 480 billion for the first batch of 20 Smart City projects.
Brokerage firm Equirus Securities in a recent report said the Smart City proposal comes with a good intent and if the objectives are met even partially, it would be a big leap forward for these cities and for the people living in them.