Nelco freezes at 10% upper circuit for 2nd straight day; hits multi-yr high

Shares of Nelco were trading at their highest level since 1992

Shares of Nelco were locked in the 10 per cent upper circuit band for the second straight day, at Rs 470.05 on the BSE on Thursday, on the back of heavy volumes with only buyers being seen on the counter. Till 02:18 pm, a combined 1.42 million equity shares had changed hands and there were pending buy orders for 123,851 shares on the NSE and BSE, data shows.

In the past three trading days, stock of the Tata Group information technology (IT) networking services company has rallied 29 per cent on the BSE and was trading at its highest level since 1992. It hit a record high of Rs 1,700 on March 24, 1992, the BSE data shows. Tata Power Company held 48.64 per cent stake, as on June 30, 2021.

The BSE, on Wednesday, sought clarification from Nelco Ltd with reference to movement in volume. The reply is awaited.

Meanwhile, according to a Economic Times report, Nelco is in advanced talks with Canadian company Telesat to launch fast satellite broadband services in India. Telesat’s Lightspeed brand will put it in direct competition with Bharti Airtel-backed OneWeb, Amazon’s Project Kuiper and Elon Musk’s SpaceX.

The user base of satellite communication in India is expected to increase to about 1.5-2 million by 2025, clocking revenue of nearly Rs 5,000-6,000 crore annually, if the operating environment eases, Icra said on Monday.

Satellite communication has been gaining prominence globally, and is being viewed as "the next big thing". Several players are entering this space and are in the process of launching a constellation of Low Earth Orbit (LEO) satellites, the report suggested.

Nelco in its annual report for financial year 2020-21 (FY21) had said that the company has signed a cooperation agreement with Telesat, one of the major global satellite players launching LEO satellites. The LEO satellites can act as ‘fibre-in-the-sky’, providing an alternative solution to terrestrial networks. This will enable the Company to serve high bandwidth segments like cellular backhaul, village connectivity, telecom networks etc., particularly in remote locations and difficult terrains. Overall, LEO satellites are a potential disruptor for the industry and once available in India, offer the opportunity for high growth for SatCom services.

The Company further said it has established itself as a leading player in both Aero IFC and Maritime communication services in India. The Company has partnered with multiple global players to enhance its offerings and reach. "The Company believes that both these sectors – Aero & Maritime have high growth potential in India, though currently subdued due to the impact of the pandemic. The IFMC services also offer opportunities to serve markets beyond India, which the Company plans to pursue in the coming years. The Company also has plans for developing newer verticals in the Enterprise market," Nelco said.