Cabinet approves Rs 2,317 crore foreign investment in IT sector

New Delhi, Aug 3 (UNI) The government today approved a Rs 2,317 crore (515 million dollars) investment by allowing Cayman Islands-based Software Development Systems and its subsidiary SDC Mauritius to acquire 100 per cent share capital of Kappa Investments Ltd.

The share capital will be used for the purpose of acquiring and holding investments in Flextronics Software Systems Ltd, which is engaged in Information Technology business, he added.

The proposal had been cleared by the Foreign Investment Promotion Board earlier.

The share capital will consist of a maximum amount of 200 million dollars of equity of a face value of Rs 10 each issued at a premium, Finance Minister P Chidambaram told reporters after a Cabinet Committee on Economic Affairs meeting.

The share capital will also consist of redeemable optionally convertible preference shares with a non-cumulative coupon rate of 0.1 per cent per annum of a face value of Rs 10 issued at par, he said.

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