Foreign fund buying in Indian carriers outside cap

Mumbai: India's central bank has clarified that the 49 percent foreign investment limit in Indian domestic airlines does not include open market buying by funds and applies only to direct investment, the Economic Times daily reported.
After the report on Tuesday, shares of Jet Airways Ltd., Deccan Aviation Ltd. and SpiceJet Ltd. rose between 1.5 percent to 3.5 percent in the Mumbai market.
The Reserve Bank of India's (RBI) observation came in response to a query from budget airline Spicejet.
The paper quoted the RBI as saying "FII (Foreign Institutional Investment) is not to be taken into account while calculating FDI (Foreign Direct Investment) in a domestic airline company."
However, investment through depositary receipts, secondary market purchase by overseas Indians and overseas corporate bodies would come under the 49 percent sectoral cap, the paper said.
20/02/07 Reuters/NDTV.com

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Categories: foreign feb 2007, General Aviation feb 2007