New Delhi: State-owned telecom company TCIL may end up diluting stake in its most profitable joint venture, Bharti-Haxacom, with Bharti Airtel in Rajasthan.

The PSU has already exhausted statutory limit of investment in a single joint venture to subscribe the proposed right issue of the JV.

Bharti-Haxacom, a JV between Bharti Airtel with over 68% stake and TCIL with 30%, has proposed a right issue and the Department of Telecom is understood to have approved it.

TCIL, a mini navratna company, is authorised to invest maximum up to 15% of its networth in a single joint venture and the consolidated investment in JV should not exceed 30%. Going by this, TCIL cannot invest further in the JV with Bharti Airtel in the proposed right issue.

This would allow Bharti Airtel to increase its stake by exercising its First Right of Refusal and subscribe to TCIL’s share in the right issue and would lead to lowering of TCIL’s stake in the Joint Venture.

TCIL’s investment in Bharti-Haxacom has been the most profitable and the company has paid a dividend of Rs164 crore to the government since inception.

But for the issue of disinvestment of TCIL’s entire stake in the JV has been referred to the Cabinet Committee.

According to sources, the Telecom Commission is not in favour of TCIL existing from the joint venture saying the disinvestment at this stage may not fetch true value as the entity is not listed on stock exchanges.

“The disinvestment at this stage when enlisting of Bharti-Haxacom is not there, the valuation will be difficult and may not be transparent,” DoT said in a note to the Telecom Commission.

Moreover, TCIL would have value addition with a joint venture with Bharti-Haxacom and if the disinvestment of the PSU is considered at a later stage it would fetch more value. By exiting from the JV with Bharti, TCIL may not get adequate GSM projects in the future.