Sistema's India Unit Seeks Foreign Investment Cap Removal - Wall Street Journal

May 7, 2014 9:32 a.m. ET

NEW DELHI—Sistema Shyam Teleservices Ltd, the Indian telecommunications venture of Russian conglomerate Sistema JSFC, AFKS.MZ +3.56% Sistema JSFC Russia: Moscow ^RUB37.80 +1.30 +3.56% May 7, 2014 6:50 pm Volume : 4.29M P/E Ratio 4.82 Market Cap RUB352.23 Billion Dividend Yield 2.54% Rev. per Employee N/A 05/07/14 Sistema's India Unit Seeks For... 04/25/14 Fresenius Enters Joint Venture... 03/27/14 Russia's Bashneft Buys Burneft... More quote details and news » AFKS.MZ in Your Value Your Change Short position has sought Indian government approval to remove a 74% cap on foreign ownership in the company.

The company said Wednesday it has applied to the Foreign Investment Promotion Board—a panel of Indian officials that reviews large investment proposals in the country—to allow foreign ownership of the company beyond the current 74% cap.

The move follows an Indian government decision last July allowing foreign companies to fully own local telecommunications ventures.

Sistema Shyam Teleservices didn't give details about its application to the FIPB. But such a move could help the Russian company deepen its presence in the world's second-largest telecommunications market, after China.

Currently, Sistema Shyam Teleservices' Russian parent Sistema JSFC owns a 56.68% stake, while the Russian government holds a 17.14% stake. India's Shyam Group owns another 24%, while the rest is held by minority investors.

Sistema's Indian venture currently operates in the less-popular code division multiple access, or CDMA, technology segment. Tata Teleservices and local Indian operator Reliance Communications 532712.BY -0.47% Reliance Communications Ltd. India: NSE ^र116.70 -0.55 -0.47% May 7, 2014 4:40 pm Volume : 3.19M P/E Ratio 20.19 Market Cap र242.42 Billion Dividend Yield 0.21% Rev. per Employee र11,019,100 05/07/14 Sistema's India Unit Seeks For... 05/02/14 Reliance Communications Profit... 02/07/14 India's Reliance Communication... More quote details and news » 532712.BY in Your Value Your Change Short position are its main competitors.

In April, U.K. telecommunications giant Vodafone Group VOD.LN +1.34% Vodafone Group PLC U.K.: London ^GBp226.90 +3.00 +1.34% May 7, 2014 3:49 pm Volume : 26.32M P/E Ratio 0.03 Market Cap GBp59.20 Billion Dividend Yield N/A Rev. per Employee GBp457,161 05/07/14 Vodafone starts international ... 04/30/14 CFO Moves: Spectrum Brands, Un... 04/29/14 Orange Sees Signs of Improveme... More quote details and news » VOD.LN in Your Value Your Change Short position PLC increased its stake in its Indian unit to benefit from the relaxed investment rules and expand in the high growth market.

Write to R. Jai Krishna at krishna.jai@wsj.com