New Delhi: Anil Ambani group firm Reliance Infratel is looking to raise about Rs5,000 crore ($1 billion) through sale of shares, for which it is in talks with a number of private equity firms.
“Reliance Infratel, a subsidiary of the group’s telecom arm RCOM, is looking to dilute 10-15% stake in a private placement of shares with the PE firms,” investment banking sources said.
The company had last year scrapped plans to raise about Rs6,000 crore through sale of about 10% shares in an IPO due to adverse market conditions.
“The company, which owns telecom towers of its parent RCOM, is looking to raise an estimated $1 billion through the placement of shares and might finalise on the names of potential investors in the coming days,” they said.
When contacted, a group spokesperson declined to comment.
The equity sale could value the company at close to $7 billion. In a previous private placement of shares, Reliance Infratel had raised Rs1,400 crore, wherein it dilute 5% stake to a host of overseas investors.
Recently, shareholders of RCOM and Reliance Infratel have approved a proposal wherein RCOM would transfer its optic fibre business to Reliance Infratel, to create a single telecom infrastructure entity.
The restructuring exercise, the two companies have said, was aimed at cutting down operating costs and identifying actual economic value arising from infrastructure business and telecom services businesses.
Due to adverse market conditions, Reliance Infratel had last year scrapped its plans for an initial public offer, wherein it had proposed to raise about Rs6,000 crore by sale of about 10% shares to fund development of passive infrastructure and general corporate purposes.
The IPO was announced in February 2008 and had got the go-ahead from market regulator SEBI in May last year. However, the SEBI nod lapsed in August since then there has been no official word on revival of the public offer.
RCOM shares today fell by about 4% to Rs333 at the BSE. The shares had rebounded sharply in the past few weeks after hitting a 52-week low of Rs131.35. The shares were trading at about Rs550 level about a year ago.