Hong Kong: Spice Communications Ltd, an Indian mobile phone venture partly owned by Telekom Malaysia Bhd., raised Rs520 crore ($128 million) in an initial public offering as investors try to tap a market whose numbers almost doubled in 2006.
The Noida-based company priced the 113.1 million new shares at Rs46 apiece, the top end of a Rs41-46 range, according to an email sent to investors. The stock will trade on the Bombay Stock Exchange.
The mobile operator and larger Indian rivals, led by Bharti Airtel Ltd and Reliance Communications Ltd, are attracting investors trying to get access to the world’s fastest-growing market last year. Spice, which offers its services in the southern state of Karnataka and Punjab in the north, plans to spend $140 million during the next two years to boost coverage.
“Spice should continue to enjoy some strong growth in the next two to three years,” said Jeffrey Tan, an analyst at OSK Research Sdn. inKuala Lumpur. “Beyond that it needs to expand by gaining a pan-India operator licence, or consolidate with other operators.” Tan rates Telekom Malaysia shares “neutral.”
Spice plans to expand beyond the two areas in the country currently covered by it, Abdul Wahid Omar, CEO of Telekom Malaysia, had said on 19 June. Telekom Malaysia, Southeast Asia’s second biggest telephone company, will own about 39% of the Indian mobile phone company after the share sale, Spice chairman Dilip Modi had said last month. Delhi-based B.K. Modi Group and its affiliates will own 41% of Spice following the IPO, he said.
Bharti Airtel, India’s largest mobile phone operator, and Reliance Communications, controlled by billionaire Anil Ambani, have been the two best performing telecom stocks on India’s benchmark index, Sensex, in the past year, according to Bloomberg data. Bharti gained 126%, while Reliance rose 109% in the 12 months, compared with a 37% increase in the Sensex, the data show.
India gained 73.7 million new cellphone users last year, outpacing the 67.7 million added in China, which is the world’s biggest market, with 494.6 million subscribers. India had 166.05 million mobile phone users at the end of the fiscal to March 2007 compared with 96.16 million at the end of March 2006, according to data supplied by the government and industry associations.
Last month, Spice sold stakes worth $10.1 million each to Lehman Brothers Holdings Inc. and Spinnaker, the company said.
Enam Financial Consultants Pvt. Ltd and UBS AG arranged the Spice share sale.Bloomberg