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Our Bureau

Mumbai, Feb. 4 Reliance Infratel Ltd, the telecom infrastructure unit of Reliance Communications, will be entering the capital markets with an initial public offering of 8.91 crore shares constituting 10.05 per cent of its post-issue paid-up equity capital of the subsidiary.

The shares will have a face value of Rs 5 each, said a statement from the company. The draft red herring prospectus was filed with the market regulator SEBI on February 4, it said.

Seven months ago, the company had sold a 5 per cent stake to a number of global financial investors, raising Rs 1,400 crore. That sale fetched a valuation of Rs 28,000 crore for Reliance Infratel.

The funds raised through the proposed IPO — which marketmen estimate will be in the region of Rs 5,000-6,000 crore — will be used to finance passive infrastructure sites and for other general corporate purposes.

Qualified institutional investors will be allotted 60 per cent of the issue, non-institutional investors 10 per cent and retail participants 30 per cent.

This draft prospectus is being filed almost a month after the Anil Ambani group company Reliance Power filed its prospectus for its record setting Rs 11,500-crore issue.

“We will not see the frenzy that we saw during the Reliance Power issue; the over-subscription levels might also go down for this issue but we will definitely see people lining up for it,” said Mr P.R. Dilip, Managing Director, Impetus Wealth Management Ltd.

The company’s business is to build, own and operate telecommunication towers and related assets at selected sites and to provide these passive telecommunication infrastructure assets on a shared basis to wireless service providers and other communications service providers under long-term contracts.

JM Financial, JPMorgan, ABN AMRO, Deutsche Equities India, Enam Securities, ICICI Securities, Lehman Brothers Securities Pvt Ltd, Macquire India Advisory Services and UBS Securities are the lead managers of the issue.

The Reliance Communications stock rose 12 per cent on BSE, to close at Rs 685.

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