Tata-Singapore Airlines aviation venture gets FIPB nod without any riders 25 Oct, 2013, 0107 hrs IST, ET Bureau Tata-Singapore Airlines aviation venture gets FIPB nod without any riders NEW DELHI/MUMBAI: The Foreign Investment Promotion Board (FIPB) has approved Tata groups proposal to set up a full service airline in partnership with Singapore Airlines, paving the runway for the high-profile aviation venture to take to the skies in the months ahead. It (Tata-SIA proposal) has been cleared, Economic Affairs Secretary Arvind Mayaram told reporters on Thursday after a meeting of the FIPB, the inter-ministerial panel for approving Foreign Direct Investment (FDI) proposals which he heads, in Delhi. The board has not imposed any rider on the venture, Mayaram said. All departments and ministries had cleared the proposal, a person familiar with the deliberations told ET. An earlier proposal by the Tata group to set up a low-cost airline together with Malaysias Air Asia had encountered some problems a few months ago. The clearance came even as representatives of the proposed airline submitting a fresh set of documents, which included a shareholders agreement to establish that the airlines control was in Indian hands. Third Attempt to Enter Indian Skies Group holding company Tata Sons will hold 51% stake in the airline Tata SIA Airlines, while Singapore Airlines will hold the remaining through an initial $49-million investment. This is the third attempt by Tatas and SIA to enter Indian skies. The Tata Group had applied for FIPB approval on September 20, the day it announced it wanted to form an airline with Singapore Airlines. Thursdays approval follows the clearance grated to the airline by the corporate affairs ministry last week. The FIPB is a recommendatory body and its decision is subject to final clearance from the finance minister. The airline will apply to the civil aviation ministry for a no-objection certificate and then the countrys aviation regulator for a flying licence. The company plans to operate a full-service airline that will take on Jet Airways and Air India and plans to initially invest around $100 million to launch operations, expected some time next year. In February, Tata group also announced a low-cost carrier with AirAsia and Delhi-based businessman Arun Bhatia. The FIPB had approved the venture, in which the group is a minority partner, in April, two months after it had sought its approval. The FIPB on Thursday cleared several other high-profile proposals, one of which entails an investment in finance firm JM Financial by former Citi global chief executive Vikram Pandit. The proposal involves an inflow of about 22 crore. Shares in JM rose 7.87% on NSE after the proposal was cleared. Singapores SingTel also received an approval to increase its stake in its Indian venture SingTel Global to 100%, the first such proposal after the government increased the FDI limit in the telecom sector from 74%. Bharti Enterprises holds 9.9% in SingTel Global. The total investment is pegged at Rs 2.98 crore. The FIPB also allowed a proposal by Federal Bank to increase foreign investment limit in the bank to 65% from 49% at present. Its shares rose 5.17% on the NSE to close at Rs 82.4.
Posted on: Fri, 25 Oct 2013 01:57:30 +0000