Vodafone to invest $1.6 billion in India

Vodafone has confirmed its intention to invest $1.6 billion to buy out minority investors in its Indian operation, following changes to Indian foreign ownership rules.

The company becomes the largest international group to utilise the liberalisation measures, following SingTel’s decision to buy out its local partners in SingTel India confirmed last week.

India’s government has been courting international investors to help its weakened economy, and the move is likely to be welcomed by the state.

There has so far been little response to the change in ownership rules in sectors including telecoms, retail and defence. Vodafone confirmed its intentions to make the move last month.

“We have always said we would like to increase our holding in the business and this further investment demonstrates Vodafone’s long-term commitment to India,” said Vodafone in a statement.

Vodafone is set to lift its ownership stake from 64%, in a process that involves the buy-out of a number of local investors, including billionaire industrialist Ajay Piramal, who holds 11% of the subsidiary.

The company has also said it is set to increase capital expenditure in its Indian unit, as part of its investment strategy following the $130 billion sale of its stake in US business Verizon Wireless.

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