Vodafone plans $1.65 bln investment to fully own India unit
British mobile phone giant Vodafone said Tuesday it was seeking regulatory approval to take full control of its Indian unit for $1.65 billion, after New Delhi relaxed foreign ownership rules in the sector.
Vodafone, the second biggest carrier in India, said it has filed an application with India's foreign investment panel to raise its stake in its local unit from 64.38 percent.
Vodafone said increasing its stake to 100 percent would cost 101.41 billion rupees ($1.65 billion), as it seeks to increase its share of the world's second-largest cellular market in terms of subscribers after China.
"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 company said in a statement.
Vodafone, which is embroiled in a $2 billion tax row with the Indian government, also said it may consider providing "additional funding" by subscribing to shares of the subsidiary, without giving more details.
The government in July relaxed rules on foreign holdings in the telecoms sector to allow companies such as Vodafone to own 100 percent of their local businesses, up from 74 percent.
The move to attract much-needed foreign investment comes as the embattled Congress-led government struggles to kickstart sluggish economic growth, which hit a decade-low last year.
Indian businessmen Ajay Piramal of Piramal Enterprises and Analjit Singh of Max India are currently the other shareholders of Vodafone India.
Revenues of Vodafone India, which has about 155 million subscribers, grew 13.7 percent to 93.62 billion rupees in the quarter ended June.
© 2013 AFP