Kingfisher imposes FII cap to make room for strategic investor

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SummaryKingfisher Airlines on Thursday said it planned to cap investments by foreign institutional investors in the company at 3%.

investors including Etihad for investments, but no agreement had been reached.

Industry observers doubt if such a deal would go through. “I don't think any foreign airline would want to invest in Kingfisher Airlines unless promoters bring in at least Rs 4,000-5,000 crore,” said Rashesh Shah, an aviation stock analyst with Mumbai-based brokerage ICICI Securities.

Kapil Kaul, CEO-South Asia at aviation consultancy Centre for Asia Pacific Aviation said Jet Airways would be a better fit for Etihad. “Buying into Kingfisher would be like starting an airline from scratch,” he said Kaul.

On Thursday, Kingfisher's shares closed 4.98% higher at Rs 17.27.

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