FDI in aviation: Stocks rally, Jet Airways zooms 13 per cent intra-day

Aviation stocks on Wednesday posted strong gains on the bourses, with Jet Airways even zooming up to 13 per cent intra-day, after the government said it would consider allowing foreign airlines to take 49 per cent stake in Indian carriers.

Shares of Jet Airways India zoomed 12.55 per cent on the Bombay Stock Exchange (BSE) during afternoon trade before closing the day up 4.96 per cent at Rs 246.55.

Spicejet soared by 10 per cent intra-day before closing at Rs 22.90, 2.46 per cent higher.

Vijay Mallya-led UB Group's Kingfisher Airlines also touched an early high of Rs 27.70, up 10.35 per cent, before paring the gains by the end of the day - up just 0.60 per cent to Rs 25.25.

"I discussed it with the finance minister and he has agreed. We will bring out a note for the Cabinet now," Civil Aviation Minister Ajit Singh said on Tuesday.

Allowing foreign airlines to pick up stake in Indian carriers would mark a major policy shift. Earlier, foreign airlines were not allowed to invest in Indian airlines though foreign direct investment was allowed.

The domestic airlines are grappling with huge debts and high jet fuel prices, among other troubles due to the weakness in overall economy, and the overseas capital from foreign carriers could provide them with the much-needed cash for operations, experts opined.