Other proposals cleared by the board include BPL Cellular, Marubeni Corporation, YKK and ABB.

As per the Essar proposal, the foreign currency convertible bond of about Rs 550 crore would go towards funding equity component of the Rs 1,840-crore Essar pellet project in Visakhapatnam.

After the conversion of bonds, the foreign equity in the project will increase to 54 per cent while the domestic component will go down from 76 per cent to 34 per cent.

The proposal envisages manufacture of pellets using iron-ore fines from Bailadila mines.

The board also cleared a proposal by Fidis Spa of Italy to set up a joint venture in the country for financial services and auto financing, for Fiat range of vehicles.

Fidis will invest about Rs 147 crore to pick up 51 per cent stake in the joint venture. Theremaining 49 per cent will be held by Sundaram Fastners.BPL Cellular has been allowed to expand paid-up capital in its joint venture with France Telecom through a rights issue.

Sources said France Telecom will bring in Rs 7.67 crore to subscribe to the issue and the stake of both the partners will remain the same.

Marubeni India, a wholly-owned subsidiary of Marubeni Corporation, Japan, has been allowed to increase its capitalisation to $15 million from the existing $5 million. Marubeni India is engaged in trading activities.YKK of Japan, an integrated zip manufacturer, has also been allowed to increase its equity capital from $25 million to $30 million.

FIPB also allowed ABB Asia's proposal to increase its stake in its joint venture with Intron India to 60 per cent from existing 30 per cent.ABB Asia will bring in Rs 10.8 lakh to increase its stake in the joint venture company, which manufactures actuator pumps.

The board also cleared a proposal by Nissin Corporation of Japan to set up a joint venturewith ABC India Ltd for international freight forwarding. Nissin would bring in Rs 1.02 crore as its stake in the joint venture.