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Rediff.com  » Business » FIPB to take up Vodafone's India investment proposal on Dec 6

FIPB to take up Vodafone's India investment proposal on Dec 6

November 25, 2013 18:55 IST

The Foreign Investment Promotion Board (FIPB) will on December 6 consider the Rs 10,141 crore (Rs 101.41 billion) proposal of UK telecom giant Vodafone to acquire the remaining stake in its Indian arm.

"The FIPB will meet on December 6. Vodafone is listed on the meeting agenda," an official source told PTI.

CGP India Investments Ltd, an indirect Mauritian unit of Vodafone International Holdings BV, has sought approval from the FIPB, headed by Economic Affairs Secretary Arvind Mayaram, to buy the stake held by minority shareholders in Vodafone India Ltd.

The UK-based telecom major holds a 64.38 per cent stake in the Indian unit.

The proposal, which was listed on the agenda of FIPB's meeting on November 13, was not taken up for want of comments from various ministries.

Opinions had been sought from the Department of Telecom, Department of Industrial Policy and Promotion, Ministry of Home Affairs, Ministry of External Affairs and the Department of Revenue.

The government had in August allowed foreign telecom companies to own 100 per cent of their businesses in India. Previously, the FDI cap in the sector was 74 per cent.

Vodafone's minority investors include billionaire industrialist Ajay Piramal, who holds an 11 per cent stake in India's second-largest telecom company by subscribers.

The remaining stake is with undisclosed shareholders. Analjit Singh, Vodafone India's non-executive chairman, is understood to be among them.

"The total inflow of foreign investment into India as a result of the proposed transactions will be approximately Rs 10,141 crore. Following the completion of these transactions, Vodafone will also consider providing additional funding to VIL by subscribing to equity shares of VIL," Vodafone had said.

Vodafone entered India in 2007 by buying Hutchison Whampoa's stake in Hutchison-Essar Ltd in a $11 billion deal.

The company was slapped with a tax liability of over Rs 11,200 crore (Rs 112 billion), along with interest, for the 2007 acquisition and is in talks with the government to resolve the issue.

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