 "Chandrababu Naidu")
By Ashutosh Joshi
A bunch of companies based in India’s southern state of Andhra Pradesh have rallied hard this month after a politician from the region backed Prime Minister Narendra Modi to form a government.
N. Chandrababu Naidu, the chief of the regional Telugu Desam Party, emerged as the biggest ally after Modi’s party lost its majority and was forced to rely on its partners to stay in power. That’s spurred speculation on the likely benefits that businesses in Andhra Pradesh could get from the new administration.
An equal-weight custom index of 20 companies that have significant operations in the state rallied, with some members jumping more than 50% in just eight sessions. Shares of dairy-products maker Heritage Foods Ltd., majority-owned by Naidu’s family, surged to a record high this month.
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“Naidu is seen as a politician having a pro-development agenda and it is quite natural to expect that with his growing prominence in national politics, companies in Andhra Pradesh can benefit,” said Ambareesh Baliga, an independent analyst.
Shares of NCC Ltd. and KNR Constructions Ltd., which develop highways and urban infrastructure, were among key the gainers this month, rising more than 15% each.
Shrimp exporters Avanti Feeds Ltd. and Apex Frozen Foods Ltd. have added at least 15% each, while battery maker Amara Raja Energy & Mobility Ltd. and Coromandel International Ltd. climbed more than 10%.
© 2024 Bloomberg L.P.
