Govt approves 15 FDI proposals including NYSE

The government of India (GOI) on May 02 has cleared the 15 Foreign Direct Investment of total worth Rs. 308.57-crore on the basis of recommendation made by Foreign Investment Promotion Board (FIPB) in meeting held on April 25, 2008. Four FDI proposals are still pending while one proposal of JM Financial Venture Ltd. has been rejected.

The biggest approved proposal is related to Ministry of Economic Affairs of worth Rs.218.51-crore in which NYSE Euronext, the corporation of US-Europe stock exchange had bid to purchase 5% stake in India’s largest commodity trading platform MCX (Multi Commodity Exchange). The government has approved this proposal and now NYSE Euronext will pump Rs.2.18-billion in MCX, the wing of Financial Technologies India ltd (FTIL).

After completing the stake deal that is likely to complete by the end of June, MCX will gain a total of 22% foreign stake while FTIL would own only 32% stake in MCX. Before this, NYSE Euronext has bought 5% stake in National Stock Exchange last year. It would be its second investment in India.

Earlier, NYSE Euronext has signed a deal with FTIL to purchase the MCX at an enterprise value of Rs 4,400 crore in February.

Besides this, Finance Minister P Chidambaram has also permitted to Foreign Direct Investment in 14 other proposals related to ministry or department of Chemicals and petro-chemicals, Commerce, Industrial Policy and Promotion, Information and Broadcasting, Textiles, Steel and Economic Affairs in which Commerce Ministry has second biggest FDI proposal following by Ministry of Information and Broadcasting, steel and Chemical and Petro-Chemical.

Commerce Ministry would get a total FDI of 54.25-crore of four foreign firms TRW Aftermarket Asia Pacific Pte. Ltd. Singapore (Rs.22.10-crore), CAREL SPA, Italy (Rs.5-lakh), Metal One Corporation (Rs.32.0-crore) and Sumitomo Heavy Industry Ltd, Japan of Rs.1-crore.

In the Information and Broadcasting Ministry, Image Multimedia Pvt. Ltd, New Delhi would induct 26% FDI of worth Rs.33.37-crore in a publishing house company that publishes specialty magazine.

Rests of the proposal were either minor FDI stake or not carrying any new cash flow.

Earlier, GOI has constrained FDI in commodity exchanges up to 26% and Foreign Institutional Investment to 23% while only 5% of foreign individual investor can incest in commodity exchange.