Vodafone move for India hits a hurdle

India’s foreign investment regulator deferred a decision on Vodafone Group Plc’s proposal to take full ownership of its Indian unit in a $1.6 billion deal, two government officials said on Monday.

Vodafone, which entered India in 2007 by buying Hutchison Whampoa’s local cellular assets in an $11 billion deal, directly and indirectly owns a combined 84.5 percent of Vodafone India, the country’s No.2 telecoms company by users.

Vodafone directly owns 64.38 percent of the India unit.

The regulator deferred the decision as it had not received security approvals from the interior ministry, one of the officials said. Both the officials refused to be named as they were not authorized to speak to media.

In August, India relaxed rules on foreign holdings in the sector to allow companies such as Vodafone to own 100 percent of their Indian businesses.

Before the rule change, foreign companies were limited to direct stakes of no more than 74 percent in Indian carriers.

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Vodafone move for India hits a hurdle