Moscow: Indian mobile telecom group Sistema Shyam TeleServices, a unit of Russia’s Sistema, was valued at $3.5 billion by an independent appraiser, a source familiar with the valuation told Reuters on Wednesday.

The Russian government has allocated 23.7 billion roubles ($780.4 million) in its 2009 budget to buy a stake of around 20% in the company.

“Sistema Shyam is valued by (appraiser) Avers at around $3.5 billion,” the source told Reuters on condition of anonymity.

Russian finance minister Alexei Kudrin said the government was completing the appraisal and the decision-making process regarding the acquisition of Shyam shares. “We hope that we will have time to make this deal this year,” he told reporters.

The valuation would put a price of some $700 million on a 20% stake. Earlier Vedomosti business daily said the state may buy 20% of Sistema Shyam TeleServices for $680 million.

Sistema Shyam operates in six of India’s 22 telecoms zones and has licences for the remainder. Sistema owns 73.71% in the company and India’s Shyam Group has 23.79%.

Avers and Sistema both declined comment.