On February 21st, 2024, the Union Cabinet approved Foreign Direct Investment (FDI) to invest 100% in the Indian space sector, under the automatic route for manufacturing components, systems, and sub-systems for satellites.
The proposed reforms aim for FDIs to invest in Indian space sector programs by creating a more open way for them to enter the Indian market. Additionally, the reforms focus on the creation of spaceports for launching and receiving spacecraft and the manufacturing of space-related components and systems.
As per a press release by the government, the satellite sub-sector has been divided into three different activities with defined limits for foreign investment in each such sector.
● Up to 74% under Automatic Route: Satellites-Manufacturing & Operation, Satellite Data Products, and Ground Segment & User Segment. Beyond 74% of these activities are under the government route.
● Up to 49% under automatic route: launch vehicles and associated systems or subsystems, creation of spaceports for launching and receiving spacecraft. Beyond 49% of these activities are under the government route.
● Up to 100% under Automatic Route: Manufacturing of components and systems/ sub-systems for satellites, ground segment, and user segment.
Private sector participation is anticipated to generate employment opportunities, enable modern technology absorption, and enhance the self-reliance of the sector.
The initiative aims to integrate Indian companies into global value chains, enabling them to establish manufacturing facilities within the country, thereby aligning with the ‘Make In India and ‘Atmanirbhar Bharat initiatives of the government. As per a report published by the Ministry of Commerce & Industry.
The stocks that gained after the government approved 100% FDI in Space Sector
Apollo Microsystems Ltd
The company shares gained 4.7% to ₹ 128.95 apiece on Thursday from the previous close price on the National Stock Exchange. The company has a market capitalization of ₹ 3,586 crores.
Apollo Micro Systems Ltd. is engaged in the development and manufacturing of rugged electronics for military applications as well as the design, development, assembly, and testing of electronic and electro-mechanical solutions. The company shares have gained a return of 123% in the last six months and 301% in a year.
MTAR Technologies Ltd
The company shares gained 8.6% to ₹ 2,065 apiece on Thursday from the previous close price on the National Stock Exchange. The company has a market capitalization of ₹6,203 crore. In a year, the stock has gained 20%.
MTAR Technologies manufactures machine tools, assemblies, subassemblies, and spare parts for the energy, nuclear, space, aerospace, military, and other technical industries.
Data Patterns (India) Ltd
The company shares gained 7.6% to ₹ 2,217 apiece on Thursday from the previous close price on the Exchange. The company has a market capitalization of ₹12,132 crore. In a year, the stock has gained 69%.
Data Patterns is engaged in the in-house development and manufacturing of the complete range of defence and aerospace systems, including space, air, land, and sea. It provides solutions for strategic aerospace and defence electronics systems.
Walchandnagar Industries Ltd
The company shares gained 5% to ₹ 232.30 apiece on Thursday from the previous close price on the Exchange. The company has a market capitalization of ₹1,069 crore. In a year, the stock has gained 290% and 131% in the last six months.
Walchandnagar Industries Ltd. (WIL) is a Heavy Engineering Company with licences for manufacturing a wide range of products, including Body armour such as Bullet jackets, Vests, Helmets, Patkas, and other defence-related equipment like bombs, UAVs, Gun mountings, missile systems, torpedoes, grenades, guided projectiles, mine layers, etc. WIL operates in key sectors such as Defence, Nuclear, Aerospace, and industrial products.
Bharat Electronics Ltd
The company shares gained 5.7% to ₹ 192.40 apiece on Thursday from the previous close price on the National Stock Exchange. The company has a market capitalization of ₹ 1,40,055 crore. In a year, the stock has gained 100% and 42% in the last six months.
Bharat Electronics Ltd. manufactures and supplies electronic equipment and systems to the defence sector. The company has expertise in designing, developing, manufacturing, and supplying a wide range of strategic electronic products/systems.
Written by Omkar Chitnis
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