Midhani, MTAR Tech, BHEL rally up to 13% on government nod to 100% FDI

Shares of companies operating in the space sector, such as MTAR Technologies, BHEL and Apollo Micro Systems, gained up to 13% on Thursday after the government eased the foreign direct investment (FDI) norms.

The Union Cabinet amended the FDI Policy allowing 100% investment in the space sector to encourage capital infusion by overseas firms and private companies in the industry.

Read more: Govt allows up to 100 per cent FDI in space

Following the ease of FDI norms for the sector, the stocks of space-related companies saw a positive movement in intraday trade on Thursday. Most of the leading stocks in the space sector closed in green on NSE.

Defence ministry PSU Mishra Dhatu Nigam Ltd (MIDHANI) surged as much as 13.65% to hit an intraday high of ₹459 per share on NSE. MIDHANI has been in a long partnership of over four decades with the Indian space agency ISRO and has supplied key components for various missions.

MTAR Technologies, a major equipment supplier to space, nuclear, defence and aerospace programmes, rallied more than 8% to hit an intraday high of ₹2,065 per share on NSE. The stock closed 6.3% higher at ₹2,024.9 apiece.

Defence and aerospace solutions provider Data Patterns India shares gained as much as 9.44% to hit a high of ₹2,255 per share on NSE before closing in green at ₹2245 apiece, up 8.9%.

Shares of state-owned Bharat Heavy Electricals Ltd (BHEL) ended 3.24% higher at ₹229.1 apiece on NSE. Earlier in the session, the stock gained 3.37% to touch a high of ₹229.4 per piece.

Besides, other leading players like Cyient and Apollo Micro Systems also closed more than 4% higher on NSE following the government’s decision to ease FDI norms for the space sector.

The government also divided the satellite sub-sector into three different activities with defined FDI limits in each sector. The Union Cabinet allowed 100% FDI in manufacturing components and systems, sub-systems for satellites, ground segment and user segment.

In satellite manufacturing and operation, satellite data products and ground segment, and user segment, FDI of up to 74% is allowed under the automatic route. However, government approval would be required for investment beyond 74%.

For launch vehicles and associated systems or subsystems, and creation of spaceports, an FDI of 49% will be allowed under automatic route.

The government mentioned that liberalised FDI policy would boost the ease of doing business, attract more FDI inflows and contribute to the growth of investment, income and employment.