New Delhi: Telecommunications Consultants India Ltd, or TCIL, may end up diluting stake in its most profitable joint venture (JV), Bharti-Haxacom, with Bharti Airtel in Rajasthan.
It has already exhausted statutory limit of investment in a single joint venture to subscribe to the proposed rights issue of the JV. Bharti-Haxacom, in which Bharti Airtel holds over 68% stake and TCIL 30%, has proposed a rights issue and the department of telecom, or DoT, is understood to have approved it.
TCIL, a mini-navratna company, is authorized to invest maximum up to 15% of its networth in a single joint venture and the consolidated investment in a JV should not exceed 30%. This means TCIL cannot invest further in the JV with Bharti Airtel in the proposed rights 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 rights issue and would lead to lowering of TCIL’s stake in the JV.
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. Sources say the Telecom Commission is not in favour of TCIL exiting the JV, saying the disinvestment at this stage may not fetch true value as the entity is not listed on the stock exchanges.