Mumbai: Telecom stocks on Wednesday gained as much as 4 percent in morning trade, after the government allowed 100 percent Foreign Direct Investment (FDI) in the sector. Shares of major service providers like Idea Cellular rose by 3.84 percent to Rs 163.50 - its record high on the BSE, while Reliance Communications jumped 3.66 percent to touch its 52-week high of Rs 151.25 and Bharti Airtel was also up 1.94 percent.
The government had earlier allowed 100 percent FDI in the telecom sector, a development which has met a key demand of the fund-starved industry. Earlier, FDI limit in the sector was 74 percent and 49 percent was done through automatic route and the rest required nod from Foreign Investment Promotion Board.
The idea behind the decision to increase FDI limit in telecom sector is to help the industry get fresh funds to lower its financial burden. The move also brings relief for foreign partners in telecom companies as they can now have complete ownership of the business.


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