R-Infratel eyes $1-bn from PE firms; may sell 10-15% stake

Anil Ambani group firm Reliance Infratel is looking to raise about Rs 5,000 crore (close to $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 per cent 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 Rs 6,000 crore (Rs 60 billion) through sale of about 10 per cent 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 one billion dollars through the placement of shares and might finalise on the names of potential investors in the coming days, they added.

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 Rs 1,400 crore (Rs 14 billion), wherein it dilute five per cent 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 Rs 6,000 crore by sale of about 10 per cent 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 Securities and Exchange Board of India 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 fell by about 4 per cent to Rs 333 at the BSE on Friday. The shares had rebounded sharply in the past few weeks after hitting a 52-week low of Rs 131.35. The shares were trading at about Rs 550 level about a year ago.