Zen Tech rallies 12 per cent as govt notifies new drone rules

New Delhi: Shares of Zen Technologies surged 12 per cent during early trade on Friday as the government unveiled a new set of liberal drone rules in the country.

Under the new rules, several approvals have been reduced to five from 25 earlier. Drones can be flown easily in green zones without any prior approval.

Also, the government has slashed charges for remote pilot license from Rs 3,000 to Rs 100 for all categories with a validity of 10 years. The minimum penalty for the violation of rules has been significantly reduced.

The aviation ministry has junked rules it had put in place this March that had shackled drones in the plethora of the clearances and went against ease of doing business.

Santosh Meena, Head of Research, Swastika Investmart, said the new drone rules will tremendously help startups and our youth working in this sector. It will help leverage India’s strengths in innovation, technology and engineering to make India a drone hub, he said.

Following the development, shares of Zen Technologies soared 12 per cent to Rs 107.75 on Friday, before trading at 103.40 at 10.05 am. BSE Sensex was trading at 55,880.56, 68.54 points or 0.12 per cent lower.

Zen Technologies is the sole listed player active in manufacturing drones in India and is expected to be the key beneficiary of the new rules.

"Zen Technologies is a debt-free company while topline growth is not encouraging but these new rules may act as a catalyst for future growth," Meena added. He expects the stock to hit Rs 133-158 levels in the near term.

However, shares of Zen Technologies have underperformed the benchmark indices in the last one year. The counter has added 22 per cent during the period as against a 21 per cent rise in BSE Sensex.

The new rules for operating drones in the country will usher in new growth opportunities and enable startups and SMEs to create innovative use cases and applications in various sectors like e-commerce, mining and emergency response, IT industry body Nasscom said.

"We welcome the government's decision to liberalise norms for operating drones in the country for both commercial and non-commercial purposes under the new Drone Rules, 2021," Nasscom added.