Vodafone applies for full control of India business

Operator group Vodafone has confirmed its intention to raise its stake in its Indian subsidiary from 64.38 per cent to 100 per cent.

The firm has made the request to India’s Foreign Investment Promotion Board and will pay around 101.4 billion rupees ($1.65bn) for the additional stake.

“We have always said we would like to increase our holding in the business and this further investment demonstrates Vodafone’s long-term commitment to India,” the operator said in a statement.

“Following the completion of these transactions, Vodafone will also consider providing additional funding to [Vodafone India] by subscribing to equity shares.

Vodafone added that it will continue to invest in India in the future “to bring the benefits of mobile communications and financial inclusion to more and more people across the country.”

Vodafone moved into India in 2007, buying Hutchison’s local operation. Several other European operators are currently present in India, including  Telenor and Sistema, as is Malaysia’s Maxis. However, they have had to partner with local firms in order to acquire telecoms licences and it has not been an easy road for them.

Previously, the level of foreign direct investment (FDI) permitted in Indian operators was capped at 74 per cent, but the country has seen much investment from European and US firms putting pressure on that cap to be lifted. As a result, the Indian government this year liberalised the FDI regime in several sectors, including telecoms and power.

India witnessed a year on year increase of 24.2 per cent in FDI to touch $ 3.95bn over the period between April to May 2013 as against, according to statistics released by the Department of Industrial Policy and Promotion (DIPP).

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