New Delhi: Mobile operator Spice Telecom, which plans to tap the capital market with an initial public offer (IPO), has got the Foreign Investment Promotion Board’s nod for the public issue.
The foreign equity in the company would increase after the proposed IPO, making it mandatory for Spice Telecom to get a prior approval from FIPB.
FIPB has approved the company’s proposal for the consideration and approval of the finance minister subject to the compliance with foreign direct investment (FDI) norms in the telecom sector, government sources said.
Spice Telecom, which had sought the approval in the new name of Spice Communications Ltd, proposes to offer its shares to qualified institutional buyers, including foreign institutional investors and mutual funds, non-institutional investors and retail investors, including NRIs.
After the proposed IPO, the foreign holding would increase to 74% of the total post-issue equity capital, from 73.78% currently. As per the country’s FDI policy, investment up to 49% in the telecom sector is permitted under the automatic route and up to 74% with prior approval of FIPB.