Vodafone Group’s proposal to buy out its minority stakeholders in Vodafone India has been approved by the Foreign Investment Promotion Board (FIPB) and recommended to Cabinet Committee on Economic Affairs (CCEA) for the final approval, since the proposed investment i.e. Rs 10,141 crore is much higher than the threshold limit of FIPB, which is currently at Rs 1200 crore, reports The Economic Times. Note that we weren’t able to find the relevant notification on the FIPB website at time of writing this article.
Vodafone group had earlier applied for the FIPB approval through its indirect subsidiary CGP India Investments Ltd, to increase its stake in Vodafone India from 64.38% to 100% by buying out the minority stakeholders like Analjit Singh (who owns 24.65% stake) and Piramal Healthcare (which owns 11% stake). The proposal was however deferred by FIPB in the December 9 meeting, since it was apparently awaiting for comments from the Ministry of Home Affairs.
If Vodafone does get the final clearance, it will probably be the first foreign telco to buy out its Indian shareholders, after the government allowed 100% Foreign Direct Investment (FDI) in telecom in July 2013. Singtel was also looking to buy out its minority shareholders in Singtel Global (India) Pvt Ltd, however the proposal was temporarily postponed by FIPB in November 2013 and later deferred. It was also on the agenda (pdf) for the FIPB meeting held on December 30th, where the Vodafone’s proposal was discussed but the status of the proposal is not available yet.
Last month, Norwegian telecom operator Telenor has raised its stake in Telewings to 74% after receiving FIPB approval to increase its stake and invest up to Rs 1,000 crore in the JV in June 2013. With time, one can expect Telenor to increase its stake to 100%.
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