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Three Year Lock-in on Equity stake Held by New Telecom Firm promoters

DoT has announced a three year lock-in period on the equity stake held by promoters of new telecom companies.

The decision is a result of frenzy stake sale by new telcos last year (for instance, Swan Telecom sold off 45% stake to UAE based Etisalat, after it got approval of operating in 13 services areas).

As per DoT

“There shall be a lock-in period for sale of equity of a person whose share capital is 10 per cent or more in the UAS licensee company on the effective date of UAS licence and whose net-worth has been taken into consideration for determining the eligibility for grant of UAS licence, till the completion of three years from the effective date of the UAS licence or till fulfilment of all the rollout obligations, whichever is earlier. In case of issue of fresh equity, within the lock-in period, the declaration of dividend and special dividend shall be barred.” – source

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