Reliance Communications to raise funds through qualified institutional placement
MUMBAI: Anil Dhirubhai Ambani Group company Reliance Communications Ltd. (RCL) plans to list its telecommunications tower subsidiary company Reliance Infratel soon.
It will soon file the draft prospectus for the initial public offering (IPO) of Reliance Infratel with market regulator Securities and Exchange Board of India (SEBI). The company had shelved similar plans more than a year ago amid poor market conditions.
The RCL board on Tuesday approved the proposal for the Reliance Infratel IPO and RCL will also consider fund raising through qualified institutional placements (QIP) at an appropriate time.
Addressing shareholders at the RCL’s annual general meeting here, company Chairman Anil Ambani said the net issue would constitute 10 per cent of the post-issue paid-up equity capital of the company and RCL would hold 85 per cent stake in Reliance Infratel post-IPO from its current holding of around 95 per cent. RCL is the second largest player in the Indian mobile telephony space and Mr. Ambani said subscriber momentum continued to be strong. The current subscriber base of the company stood at 86 million, which he expected to cross 100 million by March 2010. “The next wave of growth will come from the GSM operations,” he said.
RCL’s capital expenditure over the last two years had been to the tune of Rs. 40,000 crore, having peaked in 2008-09. However, this expected to drop substantially in the current year. The repayment liability had also been reduced by over Rs. 400 crore.
Reliance Infratel had revenues of Rs. 4,934 crore and a net profit of around Rs. 1,700 crore in 2008-09.
“We have added around 35,000 towers in the last two years and currently have 48,000 towers and around 75,000 tenants. The tenancy for Reliance Infratel will double by 2012,” he said. .