Following Civil Aviation Ministry's recommendation for 49 percentForeign Direct Investment (FDI) in aviation, theDepartment of Industrial Policy and Promotion (DIPP) has initiated the consultation process on the recommendation note.
One of the issues that DIPP will be discussing in its internal processes will be how to factor in or exempt this sector from the takeover code because going by the takeover code the net stake that one company will have to pick up will be around 51 percent. The trigger comes in at 25 percent and open offer is about 26 percent.
But the aviation ministry has recommended only 49 percent FDI. So, DIPP will have to factor in some kind of solution to ensure that the sector is ready for only 49 percent FDI. That will be one of the key issues that the ministry will have to decide on.