India’s Foreign Investment Promotion Board (FIPB) has rejected Malaysian telco Axiata Group’s proposal to increase its stake, by a reported 1%, in Indian mobile network operator Idea Cellular.
The proposal was made via Mauritius-based Axiata…
India’s Foreign Investment Promotion Board (FIPB) has rejected Malaysian telco Axiata Group’s proposal to increase its stake, by a reported 1%, in Indian mobile network operator Idea Cellular.
The proposal was made via Mauritius-based Axiata Investments 2 India, a unit of Axiata. In a press release, the regulator outlined that this transaction would have meant the “induction of foreign equity in an Indian company engaged in the business of telecom service provider.”
Foreign investment in Idea is below the 74% cap set out by local FDI rules. But, according to local newspaper the Business Standard, foreign institutional investors and non-resident Indians need to be registered with the Securities and Exchange Board of India (SEBI) in order to be allowed to acquire shares on a recognised stock exchange in the country.
Axiata Investments 2 India is reportedly not registered with the SEBI.
However, Axiata Investments 2 successfully managed, in the past, to up its stake in Idea. In August, the investment firm bought an additional 0.9% stake in the mobile network operator for Rs3.06bn (US$67m), thereby increasing its stake to 5.91%.
TMI Mauritius, another unit of Axiata, also holds a 14.07% stake in Idea.
The FIPB, Axiata and Idea were not immediately available for comment.
