Shares of space-related companies skyrocketed up to 13% after the Union Cabinet approved the Foreign Direct Investment (FDI) policy amendment to liberalise space sector provisions.  

Shares of Mishra Dhatu Nigam Ltd, Data Patterns (India), MTAR Technologies and Taneja Aerospace & Aviation Ltd saw gains of more than 8% and up to 13% during the day. 

Apollo Micro Systems, Avental Ltd, Paras Defence and Space Technologies Ltd, NIBE Ltd and Walchandnagar Industries Ltd saw a 3-5% surge. Bharat Electronics, Bharat Heavy Electricals Ltd (BHEL) and Zen Technologies inched up to 2%.

The Union Cabinet, chaired by PM Narendra Modi, announced in its press release that the amended FDI policy would allow 100% FDI satellite-related activities under the space sector in a move to attract overseas players and private companies, boost the private space industry and enhance capabilities in space exploration and satellite technology.

The government added in its release, “The liberalised entry routes under the amended policy are aimed at attracting potential investors to invest in Indian companies in space.” 

The Cabinet stated that the satellite sub-sector is now divided into three different activities, providing clarity for FDI with defined limits in each sector.

The first sub-sector for activities like satellite manufacturing and operation, satellite data products, ground segmentation and user segment can get up to 74% FDI under the automatic route, any investment beyond which necessitates government approval. 

The FDI through the automatic route limit for launch vehicles and associated systems or sub-systems and the creation of spaceports for launching and receiving spacecraft is 49%, beyond which investments in these sectors require government approval. 

Lastly, in the subsector for the manufacturing of components and systems/sub-systems for satellites, ground segments and user segments, 100% FDI under automatic route is permitted, allowing full foreign ownership without needing government approval.