New Delhi: The Cabinet on Thursday cleared UK-based Vodafone’s proposal to buy out minority shareholders in its Indian arm for Rs 10,141 crore, the single largest foreign investment in the telecom sector. After this, Vodafone India will be the first telecom operator in the country to be fully owned by a foreign company.
“Vodafone proposal has been approved,” a senior minister attending the CCEA meeting said.
The Foreign Investment Promotion Board (FIPB) had on December 30, 2013, cleared the proposal of CGP India, an indirect Mauritian subsidiary of Vodafone International Holdings BV, to hike stake to 100 per cent from the present 64.38 per cent. Since the proposal was worth more than Rs 1,200 crore it had to be referred to the Cabinet.
Last year, the government had allowed 100 per cent FDI into the telecom sector. The telecom major, which holds a 64.38 per cent stake in the Indian unit, will buy remaining outstanding shares from minority shareholders – 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 the proposal.