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Making Indian subsidiary wholly-owned -- FIPB defers Otis proposal

Ambarish Mukherjee

NEW DELHI, Aug. 15

THE plan to convert the listed Indian subsidiary of Otis Elevator Company of the US into a wholly-owned subsidiary has been deferred by the Foreign Investment Promotion Board (FIPB).

The Department of Economic Affairs, under the Ministry of Finance, had sought deferment of the proposal following which the FIPB deferred decision on the company's proposal by four weeks. The proposal will now be taken up for consideration only in Septem ber.

Currently, foreign equity component in the Indian subsidiary -- Otis Elevator Company (India) Ltd -- is 68.90 per cent. Earlier, the foreign holding was only 45.01 per cent. This was raised to 68.90 per cent in July 1999 when 23.88 per cent share in the company held by Mahindra Holding and Finance Ltd was acquired by the parent company.

Now, the company has proposed to acquire the remaining 31.10 per cent holding through the US-based parent's Mauritian subsidiary, Otis Mauritian Ltd.

According to company estimates, the total foreign exchange inflow for the acquisition will be to the tune of Rs 109.24 crore.

Otis Elevator was in the news after it came out with a public issue recently. Currently, the scrip is being quoted at around Rs 280. The 52-week high and low of the scrip are Rs 388 and Rs 167 respectively.