MUMBAI: The Foreign Investment Promotion Board (FIPB) has formally cleared the application filed by Sun TV Ltd, which envisages plans to issue preferential allotment of shares to foreign investors.

The transfer amount will be worth Rs 75 million.

In the event of a preferential allotment to foreign investors, Sun will intimate the FIPB of the "identity of the foreign institutional investors, the number of equity shares proposed to be issued and other details."

In its application last month, Sun had said that it "proposes to issue equity shares to foreign investors either by way of a preferential allotment prior to the initial public offering (IPO) and/or by an IPO offering of its equity shares of the face value of Rs 10."

Sun TV has already filed the red herring prospectus with Securities Exchange Board of India (SEBI) for its proposed IPO.

The company plans to come out with a fresh equity issue of 68,89,000 equity shares of Rs 10 each for cash, to be made entirely through the book building route.

The issue will constitute 10 per cent of the fully diluted post issue paid-up capital of the company. Following the issue, the shareholding of Sun TV principal promoter Kalanithi Maran will reduce to 89.99 per cent from 99.99 per cent (61,999,969 shares).