LONDON/NEW DELHI: Vodafone intends to increase its stake in its Indian subsidiary after the country cleared foreign companies to take full ownership of local carriers, a source familiar with the group’s plans said yesterday.
The British company is set to seek approval in the coming weeks from the Indian government’s Foreign Investment Promotion Board to buy stakes from minority partners, the source said, adding that it has yet to decide if it will buy out all partners.
Vodafone declined to comment when asked if it will increase its stake in Vodafone India. The cost of buying out minority shareholders could be as much as $2bn.
Vodafone, which entered India in 2007 by acquiring Hutchison Whampoa’s local cellular assets in an $11bn deal, directly and indirectly owns a combined 84.5 percent of Vodafone India.
In August India relaxed rules on foreign holdings in the sector to allow companies such as Vodafone to own up to 100 percent of their Indian businesses. Before the rule change foreign companies were limited to direct stakes of no more than 74 percent in Indian carriers.
Up to three foreign direct investment proposals in the telecoms sector are “just around the corner” after the rule change, Indian finance minister P Chidambarm said on Monday, without naming any company.