By hiving off RTIL as a separate company, RCoM is looking at the potential that tower business has in view of the fast growing mobile market in the country. RTIL will lease its towers to all telecom operators to set up their base stations. It will get rental from the operators for using its infrastructure.

Interestingly, the company didn’t disclose investors in the company. RCoM chairman Anil Ambani said more stake in RTIL would be sold in future through the same process and an IPO would follow. He, however, declined to give any time-frame for the venture’s listing.

Ambani said at this price, RCom’s residual 95 per cent equity is valued at Rs 26,000 crore ($6.4 billion). RTIL’s total equity valuation of Rs 27,000 crore ($6.75 billion) translates to approximately Rs 135 per RCom equity share, which is nearly 25 per cent of RCom’s current market price of Rs 565 per share. “The offering was heavily oversubscribed with a total order book in excess of 2 billion,” he said.

Ambani said “Our strategy to create a separate company for infrastructure business has resulted in tremendous unlocking of value for RCom shareholders. RTIL will be listed in the near future and provide investors another attractive opportunity to participate in India’s incredible telecom growth.”

RTIL’s wireless towers portfolio comprised of 13,849 towers as on April 10, 2007. It has a presence in all 23 telecom ‘circles’ in the country. RTIL has a build-out plan for about 23,000 new towers during FY 2008.

STAKE SALE

• Seven institutional investors from the US, Europe and Asia to buy 5% of RTIL for Rs 1,400 crore

• Parent company RCom says will list RTIL on bourses to unlock value

• RCom did not disclose names of the investors in the company.