The Indian mobile network operator, Idea Cellular stated that the company obtained an approval to raise the Foreign Direct Investment (FDI) limit from the Department of Telecom (DoT). The operator informed that the previous FDI limit stood at 67.5 percent and now has been raised to 100 percent on Monday.
The Idea Cellular, in this context, stated, “The approval is for total foreign investment up to 100% in Idea Cellular, and total indirect FDI in its relevant subsidiaries – Aditya Birla Telecom Ltd. and Idea Cellular Infrastructure Services Ltd.”
Idea Cellular is reportedly in the process of federating with Vodafone India. The approval for the merger by the telecom department is in the final stages of acceptance. The approval to raise FDI is a great step in the process of incorporation of Vodafone India and Idea Cellular. The merger process, if becomes successful, will form the biggest telecom company in India with the worth of over $23 billion.
“The FDI approval is a major milestone in the merger process of Vodafone India with Idea Cellular, and follows other statutory approvals already received from the SEBI, NSE, BSE, CCI and NCLT Mumbai and NCLT Ahmedabad,” said the company.
Once the deal is approved, Vodafone is expected to acquire 45.1 percent stake in the amalgamated entity, while 26 percent will be held by the Aditya Birla Group and the remaining 28.9 percent by Idea shareholders. In this regard, Idea Cellular has planned to organize an extraordinary general meeting (EGM) on 26th of June to amend the name of the company to ‘Vodafone Idea Ltd.’. Kumar Mangalam Birla will be the non-executive chairman of the merged company.
This Vodafone-Idea partnership is sure to boost up the competition with the other telecom companies like Bharti Airtel and Reliance Jio which are at a hype at the moment.