BHEL‘s share price rocketed in late trading on Wednesday going up over 5%.

What Happened: The surge comes as the Indian government is said to have urged power companies to make a substantial investment in equipment. The proposed investment, amounting to $33 billion (₹2.75 lakh crore), is aimed at boosting the country’s coal power output for this year, Reuters reported.

This decision is part of India’s broader strategy to bolster its energy sector and meet the increasing demand for power. Given India’s significant reliance on coal power, this move is expected to further strengthen its position in the energy market.

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This move is expected to result in record tendering this year by major power firms, including state-run NTPC and SJVN as well as private companies Adani Power and Essar Power, and is projected to help add 31 gigawatts of capacity over the next five to six years, sources told the news agency.

BHEL is seen as a major beneficiary of this expected move. The public sector firm, which secured all power equipment contracts in auctions held last year, is likely to win most of the contracts for the new equipment as well, the report added, citing sources.

Price Action: BHEL’s share price was up 4.96% to trade at ₹311.90 in the late hours of trading on Wednesday.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.