The Foreign Investment Promotion Board (FIPB) is likely to decide on the Rs 2,058 crore Jet-Etihad deal — the largest foreign investment in the Indian aviation sector — and the FDI proposal of Norway’s Telenor tomorrow.
While Jet Airways plans to sell 24 per cent stake to Abu Dhabi-based Etihad, Telenor is seeking government approval to hike stake by 25 per cent in its Indian subsidiary Telewings to 74 per cent.
Once the Jet-Etihad proposal is cleared by the FIPB, it will go to the Cabinet Committee on Economic Affairs (CCEA) for final clearance as the deal size exceeds Rs 1,200 crore.
Jet-Etihad deal assumes significance in the backdrop of government efforts to attract more foreign investments into the country. Also, the proposal comes after foreign carriers were allowed to pick up stakes in domestic airlines.
In March, the FIPB had cleared the Rs 81 crore investment proposal of AirAsia to set up a JV airline company with Tata Sons and another partner.
Among other proposals, the FIPB is also expected to take a call on the MCX (Multi Commodity Exchange of India) proposal seeking post facto approval for FDI received before issuance of Press Note 2 of 2008. The Press Note detailed guidelines of foreign investment in commodity exchanges.
Besides, the FIPB agenda includes proposals related to Alliance Insurance Brokers, Muthoot Finance Ltd and ICICI Venture Funds Management Company.
Last month, capital market regulator SEBI and fair trade watchdog CCI had sought more clarity on the Jet-Etihad deal to ensure overall competition in the aviation market is not affected and interests of public shareholders and consumers are protected.
While the queries raised by the two regulators were different, both of them are concerned about certain contours of the transaction that indicate a larger control of Etihad in Naresh Goyal-led Indian carrier despite the purchase of only 24 per cent stake, according to sources.
Meanwhile, the Civil Aviation Ministry is evaluating demands by various foreign airlines to enhance bilateral air traffic rights in the wake of a substantial hike granted to Abu Dhabi following the Jet-Etihad deal.