Govt approves 20 FDI proposals worth Rs.19.62-billion

The government on Tuesday gave green signal to 20 foreign direct investment (FDI) proposals of cumulative worth of Rs.1,962-crore of cash inflow in the country. Only one proposal has been rejected while eight are still pending.

The Union Finance Minister, P Chidambaram, on April 08 has granted permission to a cash inflow of Rs.1,962-crore in 20 FDI proposals including UTV Software Communication, GS Strategic Investment Ltd, Giorgio Armani, Hathway Cable, Datacom and PSA India Pte Ltd on the basis of the recommendation of Foreign Investment Promotion Board (FIPB).

Among 20 FDI proposals, Ministry of Finance (MoF) has approved the biggest proposal of UTV Software Communications of worth Rs.923.94-crore for induction of foreign equity by way of subscribing to equity shares in UTV Software besides picking up 15% equity shares and 7,20,000 warrants of worth Rs.118.98-crore in UTV Global Broadcasting. The proposal of further acquisition of shares by Disney through a mandatory open offer was also incorporated in it.

Earlier this year in February, the Walt Disney Company had enriched its stake in the UTV software Communication up to 32.1% from 14.85%, which would then be reach to a total of 52.1 percent stake after the successfully acquisition of open offer.

Disney’s investment in UTV Global Broadcasting (UGBL) will raise to 37.5% after acquiring its 15% stake and 7,20,000 warrants, while UTV Software Communications chairman Ronnie Screwvala will hold 10 per cent of the shares of UGBL.

In other major approvals, government has permitted to invest Rs.300-crore in a 20% stake in a domestic commodity brokerage GS Strategic Investment Ltd, which is a subsidiary of Mauritius based company Goldman Sachs.

The FDI proposals of Hathway Cable and Datacom Pvt. Ltd have also been approved. The total cash inflow in terms of foreign direct investment of Rs.217-crore will come through these cable companies.

As per the order of Bombay High Court, Finance Minister has also accepted the plan of Lafarge India to dissolve its wing Lafarge India Holding Pvt Ltd into Lafarge India Pvt Ltd. However, there was no proposal of any fresh foreign investment in this merging, as per an official release.

Singaporean Company PSA India Pte Ltd, has also got the permission to get injection up to 49% foreign equity of Rs. 240-crore by way of preferential allotment of compulsorily convertible preferential shares on Tuesday.

Besides these, two other proposals of Essar Power Limited and AXIS Private Equity have been recommended for consideration before the cabinet committee, which have the investment proposal of more than Rs 600 crore in each company.

On the other hand, the proposal of hiking foreign equity from 40 per cent to 73.45 per cent in Meta Telecom has been deferred with seven other proposals, while the proposal of Kim Eng Securities to undertake stock-broking activities as a non-fund based activity has been rejected by the MoF.