FIPB defers decision on Vodafone's Rs 10,000 cr proposal

Company's application is now likely to considered again at the next meeting, the date for which will be announced later

The Foreign Investment Promotion Board today deferred a decision on Vodafone's Rs 10,141 crore proposal to buy out minority shareholders in its Indian arm as the Ministry of Home Affairs is yet to give its comments.

 

"Decision on Vodafone deferred pending Ministry of Home Affairs comments," sources in the Finance Ministry said after a meeting of the FIPB, which is headed by Economic Affairs Secretary Arvind Mayaram.

 

Sources said the British telecom major's investment application is now likely to considered again at the next meeting, the date for which will be announced later.

 

Earlier, during the November 13 meeting, the FIPB did not take up the proposal as several government departments had not given their comments.

 

CGP India Investments Ltd, an indirect Mauritian subsidiary of Vodafone International Holdings BV, had sought FIPB approval to buy the stake held by minority shareholders in Vodafone India Ltd.

 

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

 

Besides FIPB, Vodafone also requires the approval of the Cabinet Committee on Economic Affairs because the planned investment exceeds Rs 1,200 crore.

 

The government relaxed rules in August to allow foreign telecom companies to own 100% of their businesses in India. Earlier, the FDI cap in the sector was 74%.

 

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