The Competition Commission of India, India's competition watchdog, has approved the proposed merger between two local investment management firms, saying it will not create adverse competition concern.

The planned merger of India Securities into Essar Capital will not cause concern as both are engaged in investment and financial advisory and consultancy services, the watchdog said. 

Essar also already owns a significant interest in ICL so the ultimate control of the resulting merged entity will continue to be exercised by Essar.

Essar Capital expressed interest to purchase the remaining stake it still does not own from ICL's public shareholders in March this year, or roughly 25.02 per cent. As of December 2011, the company had a 74.98 per cent stake in ICL.