The Foreign Investment Promotion Board (FIPB) has rejected a proposal by Mauritius-based Axiata Investments 2 India Ltd, part of Asian telecom giant Axiata Group, to increase its stake in Idea Cellular by acquiring shares from the open market.
Axiata Investments 2 had made a proposal to the FIPB to acquire equity shares by executing trades on the floor of the stock exchange aggregating to one per cent of the company's total issued equity share capital, the Business Standard reported.
The Axiata group currently holds 19.97-per cent in Idea Cellular through various group companies. It sought permission to acquire up to one percent additional stake through Axiata Investments 2. That would entail buying up to 33,032,725 shares from the market.
In August, Axiata Investments 2 India Ltd announced it had acquired 29,776,341 shares, or 0.9 per cent, of Idea Cellular for Rs 306.69 crore at Rs 103 a share from the stock market.
An Idea Cellular spokesperson declined to comment on the issue. The Axiata group spokesperson could not be contacted. With a subscriber base of 101 million, Idea Cellular is the fourth largest cellular operator in the country.
In the deliberations at the FIPB meeting, the department of industrial policy and promotion (DIPB) did not support the proposal on the ground that under FDI policy, acquisition of shares on a recognised stock exchange in the country was allowed only by Sebi-registered FIIs and non-resident Indians.