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Vodafone in wait mode

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New Delhi, Dec. 9: The Foreign Investment Promotion Board (FIPB) today deferred a decision on UK-based Vodafone’s proposal to buy out minority shareholders in its Indian arm in a Rs 10,141-crore deal.

Sources said the deal could not be approved as the home ministry had not yet cleared it. Investment in sensitive sectors such as defence, telecom and aviation requires security clearance, which takes time.

Vodafone entered the country around six years ago by buying Hutchison Whampoa’s Indian mobile business for $11 billion and now owns about 64.38 per cent in the India unit directly. It holds another 20 per cent stake indirectly.

Minority shareholders in Vodafone India include Piramal Enterprises and Delhi-based tycoon Analjit Singh, Vodafone India’s non-executive chairman, who owns about 1 per cent stake.

In August, the Centre allowed foreign investments up to 100 per cent in telecom firms from an earlier 74 per cent. Following this, Singtel decided to raise its stake in its long-distance telephony arm.

Analysts expect major foreign players, including Russia’s Sistema, to raise their stakes in their Indian arms, with the government revising merger norms and announcing fresh spectrum auctions.

 
 
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