Vodafone seeks nod to wholly own its Indian unit
29 Oct 2013
Vodafone Plc, the world's second-largest mobile operator, today sought FIPB approval to wholly own its Indian arm with an investment of Rs10,141 crore.
"Vodafone confirms it has filed an application with the Foreign Investment Promotion Board to increase its holding in Vodafone India Ltd from 64.38 per cent to 100 per cent," Vodafone said in a statement.
The UK-based Vodafone said in its statement that it has always maintained that it would like to increase its holding in its Indian arm, and the plan of further investment demonstrates its long-term commitment to India.
"The total inflow of foreign investment into India as a result of the proposed transactions will be approximately Rs10,141 crore. Following the completion of these transactions, Vodafone will also consider providing additional funding to VIL by subscribing to equity shares of VIL," the company said.
Vodafone India, formerly Vodafone Essar and Hutchison Essar, is the third largest mobile network operator in India after Airtel and Reliance Communication by subscriber base.
Vodafone expects to buy out minority investors, including billionaire industrialist Ajay Piramal, who holds an 11-per cent stake in Vodafone India. The remaining 25 per cent interest is with undisclosed minority shareholders, including Analjit Singh, chairman of Vodafone India.
Vodafone entered India in 2007 by buying out Hong Kong-based Hutchison in Hutchison Essar for $11 billion in a deal that was long controversial in India over its tax implications.
"Vodafone will continue to invest in India to bring the benefits of mobile communications and financial inclusion to more and more people across the country," the company statement said.
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 also the first mobile operator to have applied for going solo in the Indian market under new the new government rules that allow foreign telecom companies to wholly own their Indian units.