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    Bharti Airtel shares gain 6% after co receives govt nod to raise FDI limit in subsidiaries

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    Bharti Airtel shares gain 6% after co receives govt nod to raise FDI limit in subsidiaries

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    The share price of Bharti Airtel surged over 6 percent on Wednesday after it received a government nod to raise the FDI limit to 100 percent from 49 percent in its subsidiaries.

    The share price of Bharti Airtel surged over 6 percent on Wednesday after it received a government nod to raise the FDI limit to 100 percent from 49 percent in its subsidiaries.
    "In compliance with the FDI approval dated January 2020 granted to it by the DoT, the company has received necessary approvals for its relevant downstream investments. Accordingly, the Company is initiating the process to revise its foreign investment limit, as notified to its depositories, to 100 percent with immediate effect," it said in a BSE filing.
    After the announcement, the stock surged as much as 6.3 percent to its day's high of Rs 601.8 per share on the BSE.
    Airtel had received the approval from the DoT on January 20, 2020, for increasing the limit of foreign investment up to 100 percent of the paid-up capital of the company. The approval received by subsidiary entities now would allow Airtel to have foreign investment up to 100 percent, without its downstream entities becoming non-compliant with any norms.
    Market experts believe that the revised limit is likely to drive up its weights in the forthcoming MSCI February 2021 Quarterly Index Review.
    Brokerage house Morgan Stanley said that the approval for increasing FDI limits could help reverse the underperformance that followed after the August 2020 rebalancing.
    Meanwhile, IIFL Securities sees an inflow of around $439 million after this development. Edelweiss, on the other hand, expects a $600-700 million worth inflow.
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