FIPB to take up Vodafone's Rs 10,141 crore proposal tomorrow

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

The FIPB, which is the country's highest decision making body on foreign investment, at its meeting will also consider 10 other proposals, including that of Indian Rotocraft, Jubilant Aeronatics and HBO India Pvt Ltd, the Finance Ministry said.

FIPB is headed by Economic Affairs Secretary Arvind Mayaram.

As per the proposal before the FIPB, CGP India Investments Ltd, an indirect Mauritian unit of Vodafone International Holdings BV, has sought 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.

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, including Telecom, Home and Industry.

The government had in August allowed foreign telecom companies to own 100% of their businesses in India. Previously, 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.

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.