Vodafone gains govt. permission to fully own Indian unit

Vodafone gains govt. permission to fully own Indian unit

British telecommunications giant Vodafone Group Plc has finally gained Indian government's approval to buy out minority stake in its Indian arm to gain full control of the company.

The British telecom operator has plans to buy out remaining minority stake Vodafone India for around Rs 10,141 crore. Currently, the foreign company owns 64.38 per cent stake in the Indian venture.

Confirming the approval for stake purchase, the government said in a statement, "The Cabinet Committee on Economic Affairs has approved the proposal of CGP India Investment Ltd for increase in foreign equity in Vodafone India Ltd from 64.38 per cent to 100 per cent."

The Government's Foreign Investment Promotion Board (FIPB) had cleared the proposal of CGP India, a subsidiary of Vodafone International Holdings BV, in December last year.

The British firm will purchase remaining outstanding stake from minority shareholders Ajay Piramal and Analjit Singh, who hold 10.97 per cent and 24.65 per cent stakes in the in India's second-largest telecom firm, respectively.

Meanwhile, Vodafone Indian reported a marginal decline in service revenue in its October-December quarter. It said it earned service revenue slipped 2 per cent year-on-year, from 956 million pounds in October-December 2012 to 937 million pounds in the same three-month period of 2013.

Vodafone Plc is the first instance of a foreign telecom firm seeking full control of its Indian arm after the government hiked the foreign direct investment (FDI) limit in the sector from 74 per cent to 100 per cent in July last year.

Tagged with