Essar gets FIPB nod to boost foreign equity

Essar Group has received Foreign Investment Promotion Board's (FIPB) approval to increase the foreign equity holding in its joint venture firm, Hutchison Essar, to the permissible limit of 74%. At present, the foreign holding in the GSM operator, including both direct and indirect holding, stands at around 68%.

Essar was seeking to increase the equity held through foreign subsidiaries by 6.26% to 22.04% and FIPB is believed to granted this, after its meeting held in the capital today.

However, when contacted Essar officials declined to comment on this.

"We had sought FIPB approval for increasing our stake. However, we haven't received any official communication from FIPB and we don't know the status of our application," an Essar spokesperson said.

Hutch holds 52% stake in Hutchison Essar, while Essar has 22% foreign equity taking the total to 74%. Overall, Essar has 33% stake in the joint venture.

In the JV, while Hutch holds 52%, Essar has 22% foreign equity taking the total to 74%. In the overall JV, Essar has 33% stake.

After the increase in foreign equity holding, Hutchison's Hong Kong-based subsidiary, will hold 51.98%, while Essar group's foreign holding will be 22.02%. At present, Essar officially holds a 33.01% stake in Hutch-Essar.

Out of this, 27.21% stake is held through Essar TeleHoldings-Vilsat Investments (21.02%) and Essar-Mauritius Investors (6.19%).