Vodafone applies to raise stake in Vodafone India: reports
09 Oct 2013
UK telecom giant Vodafone has applied to the government for raising its stake in its Indian arm to 100 per cent at an estimated $ 2.7 billion (Rs 16,600 crore).
Vodafone had applied to Foreign Investment Permission Board (FIPB) for permission to up its stake in Vodafone India from 74 per cent to 100 per cent.
The telco had hiked its stake to 74 per cent in Vodafone Essar Ltd with the shares it bought from Essar in July 2011 for $5.46 billion. Essar had a 33-per cent stake Vodafone Essar at the time.
After the acquisition of Essar's 33 per cent stake, Vodafone's stake in VEL exceeded the 74 per cent FDI limit permitted at that time.
The company transferred 1.35 per cent stake to an Indian investor to comply with the existing sectoral FDI norms.
In August, 2011, Piramal Healthcare bought a 5.5-per stake Vodafone India for about Rs 2,900 crore.
The Times of India quoted sources as saying Piramal Healthcare now held about 11 per cent stake in Vodafone India and Max India's founder Analjit Singh owned about 6 per cent.
Meanwhile, according to the Financial Times, Vodafone planned to invest as much as $2 billion to buy out minority shareholders in Vodafone India.
The newspaper reported yesterday that Vodafone would file an application this month with India's foreign investment promotion board to seek clearance for the investment, citing two people familiar with the situation.
It said the size of the investment suggested that the world's second-largest telecom operator would not increase its stake to 100 per cent.
In July, India approved an increase in foreign investment limit in the telecom sector to 100 per cent from 74 per cent in a bid to lure capital inflows, to support a sliding currency and boost growth.
Vodafone was reported to be considering buying out some minority investors including billionaire industrialist Ajay Piramal, who held 11 per cent in the company.
Vodafone owns around 64 per cent of Vodafone India, while 25 per cent is controlled by undisclosed minority shareholders.