Mumbai, April 11 (IANS) Share prices of aviation companies soared Wednesday on reports that the government would this week permit up to 49 percent foreign direct investment (FDI) in the sector, allowing foreign airlines to pick up stakes in domestic carriers.
The cabinet is expected to take up the issue at a meeting Thursday, sources said.
The commerce and industry ministry has mooted the proposal to allow up to 49 percent FDI in the sector, enabling the ailing firms like Kingfisher to raise money from overseas. If approved, it could pave the way for start-up joint ventures.
Share price of Vijay Mallya-led Kingfisher Airlines climbed 6.43 percent to Rs.19.85. The cash-strapped carrier is seen to be the biggest beneficiary of the government's imminent move.
SpiceJet rallied 5.45 percent at Rs.29. Jet Airways soared 5.26 percent to close at Rs.358.50 at the Bombay Stock Exchange.
The aviation stocks rallied bucking the weak overall market trend. The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed 0.26 percent down at 17,199.40 points.
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