New Delhi, Nov 25 (IANS): The Cabinet Committee on Economic Affairs on Wednesday approved the FDI proposal for acquisition of 12.32 per cent of equity share capital, on a fully diluted basis, of ATC Telecom Infrastructure Pvt Ltd by ATC Asia Pacific PTE Ltd.

The acquisition is being done as a result of exercise of option by Tata Tele Services Ltd (TTSL) and Tata Sons Pvt Ltd (TSPL).

This share purchase would lead to foreign direct investment inflow of Rs 2,480.92 crore, a government statement said.

With this approval, the cumulative FDI of ATC Asia Pacific PTE Ltd (ATC Singapore) into ATC Telecom Infrastructure Pvt Ltd (ATC India) will be Rs 5,417.2 crore in financial years 2018-19 to 2020-21.

ATC Telecom Infrastructure Pvt Ltd is engaged in the business of providing passive telecom infrastructure services to telecom operators, pursuant to various approvals granted to it by Department of Telecommunications. The company has existing FDI approval up to 86.36 per cent and with this approval, it will rise to 98.68 per cent, on a fully diluted basis.

The inflow of foreign investment to India will spur economic growth; as well as foster innovation, the government release said.

FDI up to 100 per cent is allowed in telecom services sector wherein 49 per cent is under automatic route and beyond 49 per cent through government route, subject to observance of licensing and security conditions by the licensee as well as investors as notified by the Department of Telecommunications (DoT) from time to time.