Mumbai: Manoj Tirodkar, chairman and managing director of GTL Infrastructure Ltd (GTL), India’s largest independent telecom tower company, will invest Rs500 crore along with group companies to partially finance the purchase of the cellphone tower operations of Aircel Ltd for Rs8,400 crore, two persons familiar with the deal said.

Graphic: Paras Jain / Mint

The acquisition will more than double GTL’s towers to 28,500 from 11,000. It is building another 20,000 towers.

One of the persons said GTL would access Rs3,500 crore from its Rs5,200 crore cash reserve and Rs500 crore from Global Holding Corporation (GHC), the group holding firm.

The second person said GTL will also inherit Rs4,400 crore of Aircel’s debt as part of the deal, limiting the actual transaction to an all-cash deal of Rs4,000 crore. Both the persons declined to be named.

The Economic Times had last week reported GTL’s plan to buy Aircel’s tower.

“I cannot comment on the development," Tirodkar said. Aircel could not be reached.

GHC, fully owned by the promoters, have government approval to raise $1 billion (Rs4,700 crore) from foreign investors.

GTL, in which Tirodkar holds 53%, will purchase the Aircel towers at Rs45 lakh each. It will also give Aircel access to its towers for the next 15 years, gaining a ready tenant and a steady revenue.

In 2007, GTL, now a Rs3,700 crore company by market capitalisation, had raised Rs7,265 crore from bankers to build 23,700 towers by 2014.

The revenue of a tower company is linked to the number of tenants using the towers, known as tenancy ratio. At 0.99, GTL has the lowest such ratio among telecom tower companies in India, including Indus Towers, Reliance Infratel Ltd, and Bharti Infratel Ltd.

Indus, a joint venture between three cellular phone services providers—Bharti Airtel Ltd, Idea Cellular Ltd and Vodafone Essar Ltd—who share the towers, has increased its tenancy ratio to 1.55. Reliance Infratel, with a tenancy ratio of 1.5, has signed an deal to share its towers with UAE-based telecom firm Etisalat. Bharti Infratel has a tenancy ratio of 1.43.

The average tenancy ratio for the industry is expected to grow to 2.1 in fiscal 2012 from 1.4 in fiscal 2009, said Gaurav Jaitly and Abhishek Gupta, research analysts at Mumbai-based brokerage Reliance Equities International Pvt. Ltd, in a 25 September report.

India is fastest-growing telecom market and is expected to add 300 million connections in a few years.

The capital expenditure to build infrastructure to support such growth will be $45 billion, of which 60% will be tower-related, a GTL official said on condition of anonymity.