Aviation stocks today rallied as much as 7 per cent following news that foreign investors, barring overseas airlines, can now have up to 100 per cent stake in local carriers.
Shares of SpiceJet climbed 7.36 per cent to Rs 69.30, Jet Airways surged 6.56 per cent to Rs 586.10 and InterGlobe Aviation soared 6.02 per cent to settle at Rs 1,071.15 on BSE.
Foreign investors, barring overseas airlines, can now have up to 100 per cent stake in local carriers, the government today said unveiling significant reforms.
Besides, the norms for foreign direct investment in brownfield airports have been relaxed.
Aimed at attracting more funds into the aviation sector which has high growth potential, the NDA government's latest measure comes less than a week after the unveiling of the National Civil Aviation Policy.
Now, 100 per cent foreign investment will be allowed in "scheduled air transport service/domestic scheduled passenger airline and regional air transport service", an official release said.
Only non-airline players will be allowed to bring in 100 per cent FDI in local carriers.
Under the new set-up, 49 per cent will be through the automatic route and for anything beyond, government nod will be required. At present, up to 49 per cent FDI is permitted in scheduled airlines.
