New Delhi : The telecom ministry is the competent authority to take the final call on Idea Cellular’s proposal for infusing 100 per cent foreign direct investment (FDI) in the company, Commerce and Industry Minister Suresh Prabhu has said.
The Department of Telecom (DoT) has put some condition while seeking views of the Department of Industrial Policy and Promotion (DIPP) on the proposal.
“The matter is completely in the domain of the line ministry. We have already clarified. No need of our approval,” Prabhu said.
It was communicated to DoT that they are the competent authority to deal with the proposal, he said.
“We have sent back (the proposal) immediately. We have stated that it is for you to decide,” he said, adding that tax liabilities do not constitute additional condition. Idea’s proposal assumes significance against the backdrop of pending merger with Vodafone India to form the country’s largest telecom operator.
The FDI policy allows an overseas firm to buy up to 49 per cent stake in an Indian telecom company under automatic approval route. But the government approval is required for stake above 49 per cent. Idea and Vodafone announced last year that they would combine their operations to create the country’s largest telecom operator worth over $23 billion, with a 35 per cent market share.
Foreign shareholding in Idea as on March 31, 2018, stood at around 34 per cent, including 7.49 per cent in promoter group and the rest as public shareholders. British telecom multinational Vodafone Group plc is a majority shareholder in Vodafone India. Foreign shareholding in the combined Idea-Vodafone entity, thus, would breach the automatic approval limit of 49 per cent. According to the Idea-Vodafone merger announcement, Vodafone would own 45.1 per cent of the combined company after transferring a 4.9 per cent stake to Aditya Birla Group for Rs 3,900 crore in cash.
