Vodafone on Tuesday said it will increase its stake in India telecom venture to 100 percent for Rs 10,141 crore.
Currently, Vodafone Group of the U.K. holds 64.38 percent in Vodafone India.
Vodafone, when it exited from American telecom giant Verizon Wireless in a #130 billion deal, announced that it would invest in enhancing its network.
World’s second largest mobile operator on Tuesday sought FIPB approval to increase the stake. Last month, the telecom ministry headed by Kapil Sibal took a decision to allow foreign companies to pick up 100 percent stake in their Indian telecom arms.
“Vodafone confirms it has filed an application with the foreign investment promotion board (FIPB) to increase its holding in Vodafone India Ltd (VIL) from 64.38 per cent to 100 per cent,” Vodafone said in a statement.
Following the completion of these transactions, Vodafone will also consider providing additional funding to VIL by subscribing to equity shares of VIL. Vodafone last week said it would invest Rs 4,000 crore to Rs 6,000 crore per annuam if it could solve its spectrum issues in India, the second largest telecom market in the world.
PTI reported that the UK-based firm will buy minority investors including industrialist Ajay Piramal, who holds 11 percent stake in Vodafone India. The remaining 25 percent equity is with undisclosed minority shareholders, who are understood to include Analjit Singh, chairman of Vodafone India.
Vodafone entered India in 2007 by buying out Hong Kong-based Hutchison in Hutchison Essar for $11 billion.
The company is increasing the stake in the Indian telecom venture at a time when it is facing a $2 billion plus tax case.
Vodafone India is among the top 5 contributors to Vodafone Plc’s global revenue. In India, Vodafone ranks second in terms of mobile customers.
It is expected that promoters or joint venture partners of Sistema Shyam Teleservices, Uninor, Aircel and Tata Teleservices will be able to benefit from the government’s decision to allow 100 percent ownership in Indian cellular ventures.
The 100 percent FDI guidelines will also prompt some of the overseas telecom operators to look for investing in India during the January 2014 spectrum auction and later.
