UK-based telecom player Vodafone’s Rs 10,000 crore proposal to buy out minority shareholders in its Indian arm was today approved by the FIPB.
Vodafone’s Rs 10,141 crore FDI proposal has been cleared, sources said after the meeting of Foreign Investment Promotion Board (FIPB) here.
The telecom major, which holds a 64.38 per cent stake in the Indian unit, will buy remaining outstanding shares from minority shareholders like Ajay Piramal and Analjit Singh.
Piramal holds an 10.97 per cent stake in India’s second-largest telecom company by subscribers, while Singh, who is Vodafone India’s non-executive chairman, holds 24.65 per cent.
Vodafone Group Plc will pay Analjit Singh Rs 1,241 crore and Piramal Enterprises Rs 8,900 crore for their stakes in Vodafone India as part of a proposal.
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 decision on the Vodafone application was deferred at the previous meeting as comments from the Ministry of Home Affairs were awaited.
Reacting to the decision, a Vodafone Group statement said: “We are pleased to have obtained FIPB approval to increase our stake in Vodafone India.
“The Cabinet Committee on Economic Affairs still has to endorse this decision before either transaction can take place.”
The company has been bullish on Indian market. Vodafone Group has earmaked investment of USD 3 billion on its telecom networks in India over next 2 years.