India's market regulator has rejected a proposal by Independent News & Media (IN&M) to raise its stake in Indian publisher Jagran Prakashan.

IN&M, which already holds a 20.8 per cent stake in Jagran, had approached India's securities and exchange board last August to raise its holding by between 1 per cent and 3 per cent.

If a holder of more than 20 per cent in a company raises its stake, Indian rules require the holder to make an open offer to buy another 20 per cent.

IN&M had sought an exemption from this rule, but was turned down by the regulator.

"The committee was not convinced that this acquisition is for the benefit of the general public and in the interest of the shareholders in general," it said in a statement.

The committee said it had concluded that it was "not a fit case" to grant an exemption.

India allows foreign firms to hold up to 26 per cent in a news publication.

A spokesman for IN&M said the regulator's decision would have no material impact on the company's business in India.

IN&M had been seeking to raise its stake to bring it closer to the 26 per cent it held in Jagran prior to its listing in January 2006, the spokesman said.

Jagran Prakashan is one of India's leading media houses. It publishes Dainik Jagran, the country's highest-circulated daily with about 20 million readers a day.

Yesterday, it announced net revenues of Rs1.63 billion (€28.57 million) for the third quarter of its financial year, an increase of 29.8 per cent over the same period last year, as it benefited from better advertising and circulation revenues.

Net profit was Rs177.0 million, up almost 144 per cent from Rs72.6 million in the corresponding quarter of the previous fiscal year.