INDIA: Industry Ministry wants exemption from India takeover code for India FDI in aviation

Monday January 9 2012

It is being reported that the Indian Industry Ministry has requested an exemption for the aviation sector from SEBIs India takeover code. The Finance Ministry had given its approval to the Department of Industrial Policy and Promotions proposal to allow 26 percent India foreign direct investment by foreign airlines in domestic carriers. However, the Finance Ministry`s support came with the proviso that such an investment should not violate SEBIs India takeover code, which stipulates that an open offer is triggered once an investor acquires a 26 percent stake in a listed company. This has created a problem, as the open offer trigger would take India FDI in the domestic carrier to 51 percent, breaching the proposed cap of 26 percent. As a result the DIPP has written a letter to the Department of Economic Affairs requesting a general exemption from the SEBI policy for the aviation industry.

This information will be updated as further details become available.