NEW DELHI May 7 India's Sistema Shyam TeleServices Ltd, majority-owned by Russia's Sistema, said on Wednesday that it had sought the government's approval to raise the foreign direct investment limit in the telecommunications carrier beyond 74 percent.
India last year allowed foreign companies to fully own local telecommunications carriers, removing an earlier cap of 74 percent. But any stake increase beyond 49 percent in the telecom sector needs prior government approval.
Sistema and Russia's government together own nearly 74 percent in the unlisted Sistema Shyam joint venture, while India's Shyam Group has a 24 percent stake. The rest is owned by individual Indian investors.
A Sistema Shyam spokesman declined to comment beyond the company statement.
According to a copy of Sistema Shyam's application filed in March with India's foreign investment regulator and seen by Reuters, the approval will enable conversion of preference shares in the company held by a Sistema unit into equity shares.
Sistema Shyam last year bought new telecommunication permits in an Indian auction after its earlier permits were cancelled by court order on a broader licensing scandal. The company has said it is interested to buy more airwaves in the next auction and would need funding for that.
($1 = 60.0725 Indian Rupees) (Reporting by Devidutta Tripathy; Editing by Ryan Woo)