NEW DELHI: The Finance Ministry has deferred any decision on proposals by two multi-system operators (MSOs), Hathway Cable and Datacom Limited and Den Networks, for increasing the foreign direct investment to 74 per cent.
The action was taken on the advice of the Foreign Investments Promotion Board (FIPB).
Hathway Cable and Datacom Limited had sought approval for increasing foreign investment limit for FIIs, FPIs, etc. under the Portfolio Investment Scheme from 49 per cent of its issued and fully paid up share capital to 74 per cent.
The government had in 2012 relaxed foreign direct investment (FDI) limit in direct to home (DTH), cable TV industry and teleports from 49 per cent to 74 per cent.
In January, Hathway Cable & Datacom, which became the first MSO to have crossed the $1 billion mark in terms of enterprise valuation, announced that its Board of Directors had approved and passed the resolution to increase the foreign investment limit from the current 49 per cent to 74 per cent, subject to approval from the FIPB of India, Ministry of Finance and/or the Reserve Bank of India (RBI).
“Subject to receipt of approval of the Foreign Investment Promotion Board of India, Ministry of Finance and / or the Reserve Bank of India and all other applicable authorities, increasing the foreign investment limit only by Foreign Institutional Investors, Foreign Portfolio Investors, etc. under the Portfolio Investment Scheme in accordance with Schedules 2 and 2A of the Foreign Exchange Management Act (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 in the Company from 49 per cent to 74 per cent of the issued arid fully paid-up share capital of the Company,” read the announcement.
Meanwhile, Den had sought for increase in foreign investment limit beyond 49 per cent and up to 74 per cent by FIIs, NRIs, FPIs, and other eligible foreign investors through route of secondary market and / or open market purchase.
A spokesperson for Den said that it would wait to hear from FIPB about the reasons for deferring the decision, before reacting.
Earlier in March this year, the Board of Directors of Den Networks approved this proposal to increase foreign investment limit from the existing 49 per cent to 74 per cent of the issued and fully paid-up share capital of the company.
The decision was subject to shareholder approval (through postal ballot), Foreign Investment Promotion Board nod and adherence to all other statutory requirements. Currently, FIIs hold 20.27 per cent stake in Den Networks.
