A V Birla group telecom company Idea Cellular received government approval for foreign investment of upto 74% equity. Further, it has proposed public issue to raise Rs 25 billion, reports Economic Times.

The proposal by the company, in which foreign investment stands at 47.55 at present, is believed to have been cleared by Foreign Investment Promotion Board, allowing it to enhance the foreign holding to 74%.

As per norm, FDI in telecom companies up to 49% is on automatic route and FIPB approval is required if the foreign investment has a bearing on the overall ceiling of 74%.

Moreover, the company is expected to get the approval from SEBI for its draft prospectus in the next 10 days and is likely to hit the market in the second week of February. The company has got two letter of intent (LoIs) for Mumbai and Bihar.

The government has also allowed foreign institutional investors and overseas venture capital funds to invest in the Aditya Birla Group`s telecom venture`s upcoming Rs 2,500-crore initial public offer.

Idea had filed a red herring prospectus with the Securities and Exchange Board of India (Sebi) for the entirely book-built IPO. The Aditya Birla group has already divested nearly a 33% stake to a handful of investors -Providence Equity Partners of the US, India`s ChrysCapital, the UK`s TA Associates and GLG Partners and Citigroup.

Idea, founded in 1995 as Birla Communications, has undergone many changes in shareholding with AT&T Communications and the Tata family selling their stakes at different periods, leaving the controlling stake with the Birlas