MTS India, a joint venture between Russian conglomerate Sistema and India’s Shyam Group, is working on a new application to boost its foreign ownership to more than 74%.
A spokesperson for MTS India, in which Sistema has the majority stake, said the…
MTS India, a joint venture between Russian conglomerate Sistema and India’s Shyam Group, is working on a new application to boost its foreign ownership to more than 74%.
A spokesperson for MTS India, in which Sistema has the majority stake, said the due process for filing the application should be completed within the next 15 days.
Last September, the Foreign Investment Promotion Board (FIPB) rejected a proposal from the mobile operator to increase its foreign ownership as a result of issues surrounding the deal’s planned structure. The Department of Telecommunications had said it was structured like an overseas debt deal rather than a foreign direct investment.
The spokesperson said MTS India is addressing FIPB’s observations in its new application.
FIPB clearance would pave the way for Sistema to buy out its Indian partner.
Currently, Sistema has a 56.68% direct stake in MTS India, the Shyam Group has a 24% stake and the Russian Federation has a 17.4% holding. The remaining 2.18% of shares are held by the public.
The Indian government removed a 74% threshold for foreign investments in telecoms operators in September 2013. Vodafone was the first company to take advantage of the change in regulation by taking full control of Vodafone India. Telenor followed suit, boosting its stake in Uninor to 100%.
MTS India is not taking part in the country’s current 2G and 3G spectrum auction as it considers the prices too high.
