Shares of defence and aerospace related companies including MTAR Technologies, IdeaForge Technology, Bharat Heavy Electricals (BHEL), Mishta Dhatu Nigam (Midhani) and more hogged spotlight during the trading session on Thursday after the Union Cabinet approved the amendment in the foreign direct investment (FDI) policy on space sector on Wednesday.
India has relaxed rules to allow 100 per cent foreign direct investment (FDI) in the space sector in a move aimed at promoting investment, according to a government notification on Wednesday. The satellite sub-sector has now been divided into three different activities with defined limits for foreign investment in each such sector, said the release by the Government of India.
Following the announcement, shares of Mishra Dhatu Nigam Ltd (Midhani) surged about 9 per cent to Rs 438.95 on Thursday, over its previous close. Similarly, MTAR Technologies Ltd gained on similar ground, rising about 9 per cent to Rs 2,065 compared to its previous close at Rs 1,900.55.
Under the amended FDI policy, 100 per cent FDI is allowed in space sector. The decision was taken at the Cabinet meeting led by Prime Minister Narendra Modi. “The liberalized entry routes under the amended policy are aimed to attract potential investors to invest in Indian companies in space,” the government said in its press release.
Among other stocks, Apollo Micro Systems Ltd rallied about 5 per cent to Rs 128.95 on the opening tick, while Paras Defence and Space Technologies Ltd jumped about 4 per cent to Rs 754.40. Data Patterns (India) Ltd rose more than 3 per cent to Rs 2118 in the early trade.
Buying was seen in Bharat Heavy Electricals Ltd (BHEL) and Ideaforge Technology Ltd inched 2 per cent higher each, hitting Rs 226.70 and Rs 741.70, respectively. Among the smaller peers, Taneja Aerospace & Aviation Ltd and NIBE Ltd also advanced up to 2-3 per cent each.
The Indian government has allowed 100 per cent FDI in the space sector to attract global investment, boost the private space industry, and enhance capabilities in space exploration and satellite technology, said Atul Parakh, CEO at Bigul, a discount broker. “This move aims to achieve product sophistication on a global operations scale, and increase India’s share in the global space economy.”
India’s information technology minister, Ashwini Vaishnaw, last month said the country was eyeing $100 billion in annual foreign direct investment (FDI) in the next few years. According to a report from Reuters, India attracted FDI inflows of $33 billion in the first half of the financial year that started in April 2023. It recorded a total FDI of $71 billion in the previous financial year.
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