The country's oldest private telecom company Airtel can now become a foreign company. The central government has approved raising the foreign direct investment (FDI) limit in Bharti Airtel from 49 percent to 100 percent. The company has given this information to the stock market on Tuesday.
Significantly, the Reserve Bank had already allowed foreign portfolio investors (FPIs) or foreign institutional investors (FIIs) to invest up to 74 percent of the paid-up capital in the company. Bharti Airtel's business is currently spread across 18 countries in the world. 24 years ago on 7 July 1995, Sunil Bharti Mittal first started Airtel in Delhi.
After this approval, the troubled Airtel will be able to get funds from foreign investors for paying their dues, network expansion and spectrum auction. Significantly, after the arrival of Jio, the condition of the telecom companies is bad due to strong competition and the obligation to give thousands of crores of rupees to the government on AGR. In such a situation, they have been forced to resort to measures like foreign investment to save their existence.
Bharti Airtel has said in the information given to the stock market, "Bharti Airtel Limited has received approval from the telecom department to increase the foreign investment limit to 100 percent of the paid-up capital of the company on 20 January 2020."
It is worth noting that a few days ago, the company has paid about 35,586 crore rupees as statutory dues. There was a license fee of Rs 21,682 crore and spectrum of Rs 13,904.01 crore. It does not include the arrears of Telenor and Tata Tele.
After 100 percent FDI approval, the country's oldest private communication company can become a foreign entity. Bharti Telecom is the promoter company of Bharti Airtel. About 41 percent stake in Bharti Airtel is owned by Bharti Telecom and it currently holds 21.46 percent foreign investment. The share of common shareholders in the company is 37 percent. Bharti Telecom had sought permission from the government last month for an investment of Rs 4,900 crore from Singapore's Singtel and other foreign companies.
So with Bharti Telecom becoming a foreign entity, the foreign shareholding in Bharti Airtel will increase to 84 percent. Currently, Sunil Bharti Mittal and his family have about 52 percent stake in Bharti Telecom.
