Russian government to make its $600 million investment in the MTS

Sistema Shyam Teleservices, the Indian arm of Russia's Sistema, which promotes the MTS brand, expects the Russian government to make its $600 million investment in the company by October, a top official said on Wednesday.The Russian government will get a 20 per cent stake in Sistema Shyam, which holds telecoms licences for the whole of India, as a result of the investment, Chief Executive Vsevolod Rozanov told reporters.

"Our immediate funding requirements will be taken care of with this investment," Rozanov said. Sistema owns 73.71 per cent of the Indian firm, while India's Shyam Group owns the remainder in Sistema Shyam Teleservices. After the issue of shares to the Russian government, Sistema's stake will be diluted to 54 per cent.Russian Prime Minister Vladimir Putin had in March this year pledged state financial aid for Sistema Shyam.Rozanov said Sistema Shyam would turn EBITDA positive in 2013, though mobile call tariffs were expected to fall further.The entry of new players has crowded India's telecoms space and made it fiercely competitive, leading to dramatic fall in mobile phone tariffs and hit mobile operators' profitability.Recently Sistema Shyam had said it would invest around $1 billion in its India operations over the next one year.

India can be the third highest economy for foreign direct investment in 2010-2012

India climbed four notches to be ranked the ninth most attractive investment destination in 2009 with a total foreign direct investment inflow of $34.61 billion, a UN report revealed on Thursday. India attracted sizeable overseas investment despite the overall drop in such inflows due to the
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global financial crisis, said the World Investment Report-2010, prepared by the United Nations Conference on Trade and Development.

"If the situation continues to improve, India is likely to be among the most promising investor home countries in 2010-2012, as well as the third highest economy for foreign direct investment in 2010-2012," said the report.

"In 2008, though India attracted higher foreign direct investment worth 40.42 billion, its ranking was lower at 13th. China nudged further up to second at $95 billion from a third place last year," said Rashmi Banga, senior economist with Unctad.

The US remained the top investment destination with inflows of $130 billion in 2009, followed by China, France, Hong Kong, Britain, Russia, Germany, Saudi Arabia, India and Belgium. Total inflows amounted to $1.11 trillion, against 1.77 trillion in 2008.

In 2009, Indian firms and funds also invested a lower amount of $14.89 billion overseas, compared to a $18.4 billion in 2008.

"But such outflows are expected to rebound in 2010 sustained by merger and acquisition opportunities associated with Indian and Chinese firms' persistent pursuit of natural resources and markets," the report said.

The report also said that five Indian companies figured in the list of top 100 non-financial trans-national corporations, ranked by their foreign assets overseas.

Among them Tata Steel was ranked 15th, the state-run Oil and Natural Gas Corp in the 20th position, Hindalco in 29th rank, Tata Motors in 40th position and Suzlon in 54th.