With this, the merger with Vodafone is expected to be completed in the first half of this year
Idea Cellular has received an approval to increase foreign direct investment (FDI) limit in the company to 100%, from the current 67.5%.
The approval came from the Department of Telecom (DoT) on Monday, the company said in a statement.
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 said in a statement.
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 Securities and Exchange Board of India, NSE, BSE, Competition Commission of India, Mumbai bench of National Company Law Tribunal (NCLT) and NCLT Ahmedabad.
The merger of Vodafone India with Idea Cellular is expected to be completed in the first half of this year subject to the final approval from the DoT, the company said.
DNA Money had last week reported that the final approval to the biggest merger in India's telecom industry – between Vodafone India and Idea Cellular -- which will create the largest telecom player in the country surpassing Bharti Airtel, may come within next few weeks.
Both the companies had announced a merger last year, following the entry of Mukesh Ambani-owned Reliance Jio, which triggered a consolidation phase in the telecom industry, forcing small and marginal players to exit the hyper-competitive market.
Bharti Airtel has taken over Telenor India and announced the acquisition of wireless operations of Tata Group; Reliance Jio has agreed to buy wireless assets of Reliance Communications and Aircel has filed for bankruptcy.
Following the consolidation, the industry will likely be left with three players - Airtel, Vodafone-Idea combine and Reliance Jio along with a public sector telecom player - BSNL or MTNL.
...& ANALYSIS
- 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
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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 Securities and Exchange Board of India, NSE, BSE, Competition Commission of India, Mumbai bench of National Company Law Tribunal (NCLT) and NCLT Ahmedabad.
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