Mumbai: Foreign telecom firms are talking to Reliance Communications about taking a stake of 20 to 26% in India’s second-largest mobile operator, the Economic Times reported, citing a banking source with knowledge of the discussions.
The unnamed banker told the paper the strategic investor would buy shares from the secondary market, and then be allocated fresh shares through a preferential allotment.
The paper also cited the source as saying that the deal would be “biased” in favour of the secondary market, as Reliance Communications was not willing to dilute equity substantially, but added the deal would hinge on whether the Indian telecom could get a big premium over its current price.
Shares in Reliance Communications rose 10.2% to Rs228.25 on Wednesday, their highest close in a month, although the stock is down 69.4% so far in 2008.
Reliance Communications is part of the Anil Dhirubhai Ambani Group, controlled by Anil Ambani.
“The promoter, who owns 67% is not selling equity and nor will he participate in the open offer,” the paper quoted the source as saying.
Reliance Communications, which has a market capitalisation of $9.6 billion, is one of the few major telecom companies in India without a foreign partner.
Earlier this year, Reliance Communications and South Africa’s MTN failed to reach a deal in tie-up talks aimed at creating a top-10 global telecoms group.
The company could not be reached for comment immediately.