 "Defence, aviation shares gain as government eases FDI rules")
Shares of companies engaged in defence and aviation sectors have rallied by up to 12% on the BSE in intra-day trade, after the government on Monday relaxed foreign direct investment (FDI) norms in civil aviation, airports, pharmaceuticals and defence sectors. LINK
Global Vectra Helicorp (up 12% at Rs 88), SpiceJet (7% at Rs 69), Jet Airways (6% at Rs 585) and InterGlobe Aviation (5% at Rs 1,057) from the aviation sector were up between 5%-12% on the BSE.
Reliance Defence and Engineering (up 9% at Rs 66.85), Walchandnagar Industries (6% at Rs 154), Astra Microwave Products (4% at Rs 124), Dynamatic Technologies (3% at Rs 2,557), BEML (3% at Rs 863) and Bharat Electronics (2% at Rs 1,289) from defence sector up in the range of 2%-9% on the BSE.
At 02:28 PM, the S&P BSE Sensex was up 0.83% or 221 points at 26,847.
The government has allowed up to 100% FDI in defence through the approval route, 100% FDI in food product e-commerce, 100% FDI in greenfield pharma via the automatic route and 74% in brownfield projects, 100% FDI in scheduled airlines and up to 49% FDI in airlines through the automatic route, the Business Standard report suggest. CLICK HERE TO READ THE FULL REPORT.
"Under the new FDI norms, 74% FDI would be allowed in pharmaceutical sector under the automatic route which means that investors will not need government's approval to invest up to 74% in existing companies. Currently, FDI up to 100% is permitted in new projects in the pharmaceutical sector but in Brownfield ones –the existing companies– the foreign investment is permitted through FIPB approval. The new norms will enable enhanced investments (in the form of M&A Activity) from the MNC companies, which believe in the growth potential of the Domestic Industry. We remain positive on the sector," said Sarabjit Kour Nangra, VP Research- Pharma, Angel Broking in a note.
Global Vectra Helicorp (up 12% at Rs 88), SpiceJet (7% at Rs 69), Jet Airways (6% at Rs 585) and InterGlobe Aviation (5% at Rs 1,057) from the aviation sector were up between 5%-12% on the BSE.
Reliance Defence and Engineering (up 9% at Rs 66.85), Walchandnagar Industries (6% at Rs 154), Astra Microwave Products (4% at Rs 124), Dynamatic Technologies (3% at Rs 2,557), BEML (3% at Rs 863) and Bharat Electronics (2% at Rs 1,289) from defence sector up in the range of 2%-9% on the BSE.
At 02:28 PM, the S&P BSE Sensex was up 0.83% or 221 points at 26,847.
The government has allowed up to 100% FDI in defence through the approval route, 100% FDI in food product e-commerce, 100% FDI in greenfield pharma via the automatic route and 74% in brownfield projects, 100% FDI in scheduled airlines and up to 49% FDI in airlines through the automatic route, the Business Standard report suggest. CLICK HERE TO READ THE FULL REPORT.
"Under the new FDI norms, 74% FDI would be allowed in pharmaceutical sector under the automatic route which means that investors will not need government's approval to invest up to 74% in existing companies. Currently, FDI up to 100% is permitted in new projects in the pharmaceutical sector but in Brownfield ones –the existing companies– the foreign investment is permitted through FIPB approval. The new norms will enable enhanced investments (in the form of M&A Activity) from the MNC companies, which believe in the growth potential of the Domestic Industry. We remain positive on the sector," said Sarabjit Kour Nangra, VP Research- Pharma, Angel Broking in a note.