Russian conglomerate Sistema has sought for an approval from the Foreign Investment Promotion Board (FIPB) to increase its 73.71% stake in Sistema Shyam Teleservices Ltd (SSTL), reports The Economic Times. An SSTL spokesperson has confirmed this development to the publication.
The report says that Sistema eventually plans to buy out its Indian partner Shyam Telecom’s stake in SSTL, thereby increasing its stake in the company to 100%. Citing sources, it however suggests that this stake increase will happen across multiple tranches than through a single transaction.
This move was quite expected now that India allows 100% Foreign Direct Investment (FDI) in telecom. Last month, Vodafone group had bought out Vodafone India’s minority stakeholders like Analjit Singh and Piramal Healthcare to acquire 100% stake in the company. It had paid Rs 8,900 crore for Piramal Healthcare’s 11% stake and Rs 1,241 crore for Analjit Singh’s 24.65% stake.
Norwegian telecom operator Telenor had also 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. In March this year, Telenor Group’s Asia head Sigve Brekke had stated plans of increasing its Uninor stake to 100%, although he noted that there was no immediate plan to do this.
Until recently, Sistema was probably the only telco which was focusing on the CDMA services in the country, with Tata Teleservices surrendering 20MHz CDMA spectrum in December 2013. However, Reliance Communications had mentioned last month that it was renewing focus on its CDMA services now that its CDMA voice revenues have started stabilizing and the CDMA handset ecosystem has begun improving in the country.