The Foreign Investment Promotion Board will take a decision on November 13 on British telecom major Vodafone’s proposal seeking approval to invest Rs 10,141 crore for raising its stake in India unit to 100 per cent.
CGP India Investments Ltd, an indirect Mauritian subsidiary of Vodafone International Holdings B V, has applied to FIPB seeking its approval to buy stake held by minority shareholders in Vodafone India Ltd.
The application is listed on the agenda of November 13 meeting of the Foreign Investment Promotion Board (FIPB), which is headed by Economic Affairs Secretary Arvind Mayaram.
The UK-based telecom major at present holds 64.38 per cent stake in its Indian arm Vodafone India.
After the FIPB approval, the matter will go to the Cabinet Committee on Economic Affairs upon whose approval Vodafone India is expected to become the first mobile operator in the country to be fully owned by a foreign company.
The government in August relaxed rules to allow foreign companies to own 100 per cent of their businesses in India. Earlier, the FDI cap in the sector was 74 per cent.
Vodafone’s minority investors include billionaire industrialist Ajay Piramal, who holds 11 per cent stake in India’s second largest telecom company by subscriber base.
The remaining nearly 25 per cent interest is with undisclosed minority shareholders. Analjit Singh, Vodafone India non-executive chairman, is understood to be one 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 earlier said.
Vodafone, which entered India in 2007 by buying Hutchison Whampoa in Hutchison-Essar Ltd in a $ 11 billion deal, directly holds 64.38 per cent stake in Vodafone India.
The telecom major was slapped with a tax liability of over Rs 11,200 crore, along with interest, for the 2007 acquisition and is in discussions with the government to resolve the issue.