Stocks of companies in the aviation and airline space on Friday soared after the government implemented the decision to liberalise foreign direct investment (FDI) in these sectors.
Kingfisher Airlines soared 5.1 per cent to Rs 13.12, while the SpiceJet scrip gained 2.5 per cent to Rs 37.7 and Jet Airways rose by over two per cent to Rs 367.7 on the Bombay Stock Exchange (BSE). Among retail stocks, Pantaloon Retail shot up 4.7 per cent to Rs 182.9 and Provogue surged 7.9 per cent to Rs 18.21. Other stocks, including Koutons Retail, Shoppers Stop and Brandhouse Retails, also ended positive.
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 liberalise foreign investment in aviation and broadcasting.
| HIGH ON FDI BSE price in Rs | ||
| 21-Sep | %chg* | |
| Retail stocks | ||
| Store One Retail | 33.79 | 13.01 |
| Provogue | 18.21 | 7.88 |
| Pantaloon Retail | 182.90 | 4.69 |
| Brandhouse Retails | 14.55 | 3.93 |
| Aviation stocks | ||
| Kingfisher Airlines | 13.12 | 5.13 |
| SpiceJet | 37.70 | 2.47 |
| Jet Airways | 367.70 | 2.14 |
| *change over previous days Data compiled by BS Research Bureau | ||
Brokers said buying emerged after the government went ahead implementing its decisions to allow FDI in multi-brand retail and allowing foreign airlines to invest in airlines.
Some of these stocks were beaten down yesterday.
“The government of India has reviewed the position in this regard and decided to permit foreign airlines also to invest in capital of Indian companies operating scheduled and non-scheduled air transport services up to the limit of 49 per cent of their paid-up capital,” a notification by the Department of Industrial Policy and Promotion, said.
This would pave the way for much-needed equity infusion into Indian carriers, in dire need of funds for 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.
Under the notification relating to FDI in multi-brand retail, multinational companies can invest up to 51 per cent to open stores in 10 states and union territories which have so far agreed to implement the government decision.
The BSE benchmark 30-share index, Sensex, on Friday ended 403.58 points, or 2.2 per cent higher at 18,752.83 points.
