Shares of defence equipment makers fell sharply by as much as 10% on Thursday amid finance minister Arun Jaitley raising foreign direct investment in the sector to 49%.
Bharat Electronics shares tanked 9.71%, while Astra Microwave Products was down 8.45% on the BSE.
Among others, BEML fell by 4.99%, Walchandnagar Industries (4.78%) and Dynamatic Technologies (2.3%).
FDI in defence sector raised to 49%, Jaitley said while presenting the Budget for 2014-15.
As per the current FDI policy, up to 26% FDI is permissible in the defence sector subject to licensing through government route.
Meanwhile, selling was also seen in the broader market with the BSE benchmark Sensex trading lower by 280.40 points to 25,164.41 during noon trade.