Ispat India Plan To Float Basic Services Holding Company

The holding company called Ispat Telecom Holding Pvt Ltd will have a 48 per cent foreign equity stake. According to an unconfirmed report, Induchem Securities of Mauritius will hold the foreign stake.

The equity of the holding company will be used to finance Ispats 51 per cent stake in Hughes Ispat. Ispat has a tie-up with US majors Hughes Corp and Eltel Corp in Hughes Ispat.

The company had got an approval for the holding company joint venture in the last meeting of the foreign investment promotion board. In fact, Ispat has got clearances for two more holding (or investing) companies, Ispat Communication Pvt Ltd and Ispat India Telecom Pvt Ltd, at the FIPB meeting.

 

All the three holding company JVs were to have equity of Rs 49 crore each in which the foreign holding component was to be 48 per cent. It is not yet clear as to the reason to float three holding companies, unless Ispat Ltd wants to adopt a three-tiered holding company structure, telecom sources said. Hughes Ispat officials were not available for comment.

Telecom sources say that R P Goenka-led Basic Teleservices is also planning a holding company to finance its investments in the Tamil Nadu basic telecom services project, despite the uncertainty surrounding the project. A proposal by the RPG group to float a holding company (christened RPG Telephone Ltd) was also cleared at the FIPB meeting.

Holding companies in infrastructure services were cleared by the government a few weeks back. DoT has already received several such proposals in cellular telecom services to fund the Indian promoters contribution in the equity of the operating companies.

The holding company route is expected to halve the domestic equity requirement by half.