The shares of aviation companies today gained up to 6 per cent after the Government implemented the decision to liberalise foreign investment in the sector.
Kingfisher Airlines soared 5.76 per cent to Rs 13.20, while the Spicejet scrip gained 4 per cent to Rs 38.30 on the BSE. Jet Airways rose by 2.44 per cent.
Last evening, unfazed by opposition even from its own allies, the Government went ahead implementing its decisions to allow FDI in multi-brand retail and liberalising foreign investment in the aviation and broadcasting sectors.
“The Government of India has reviewed the position in this regard and decided to permit foreign airlines also to invest in the capital of Indian companies operating scheduled and non-scheduled air transport services up to a limit of 49 per cent of their paid-up capital,” a notification by the Department of Industrial Policy and Promotion (DIPP) said.
This would now pave the way for much-needed equity infusion into Indian carriers which are in dire need of funds for their operations.
Investments in the aviation sector would be made under the Government approval route and the parties need to comply with regulations of the Securities and Exchange Board of India.
Earlier, no foreign airline was allowed to invest in Indian carriers directly or indirectly.
Stock markets cheered the move and the BSE 30-stock index, Sensex, was in the green at 18,663.27 — up 314.02 or 1.71 per cent at 11.25 hrs.