Reliance Infratel IPO to hit markets soon

Reliance Infratel, a subsidiary of the Reliance Communications, proposes an initial public offering (IPO) of 89,164,100 equity shares of Rs 5 each for cash at a premium to be decided through the 100% book building process.

The issue will constitute 10.05% of the post-issue paid-up equity capital of the company.

The company has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), today. (Feb. 04, 2008)

At least 60% of the issue to the public will be allocated on a proportionate basis to qualified institutional buyers (QIBs), of which 5% will be available for allocation to mutual funds only and the remaining QIB Portion will be available for allocation to all the QIB Bidders, including mutual funds, subject to valid bids being received at or above the issue price.

Further, 30% of the issue will be available for allocation on a proportionate basis to the retail individual bidders and 10% of the Issue will be available for allocation on a proportionate basis to non-institutional bidders.

The company is part of the Reliance Anil Dhirubhai Ambani group and its business is to build, own and operate telecommunication towers and related assets at designated 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.

These customers use the space on the company`s telecommunication towers to install their active communication-related equipment to operate their wireless communications networks.

The issue proceeds are proposed to be utilized to finance the development of passive infrastructure sites and for general corporate purposes.

The equity shares of the company are proposed to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE).

JM Financial Consultants, JP Morgan India, ABN AMRO Securities (India), Deutsche Equities India, Enam Securities, ICICI Securities, Lehman Brothers Securities, Macquire India Advisory Services and UBS Securities India are acting as the book running lead managers to the issue.

HSBC Securities and Capital Markets (India), Kotak Mahindra Capital Company and SBI Capital Markets, are acting as co-book running lead managers.