Reliance Comm had last year struck a PE deal with a consortium of seven investors: Fortress Capital, HSBC Principal Investments, Galleon Group, New Silk Route, GLG Partners, George Soros' Quantum Fund and DA Capital. This transaction in July'07 involved 5 per cent stake for Rs 1,400 crore or $337.5 million valuing the business at about $6.75 billion.
As per the stock market disclosures by Reliance Comm, the IPO would involve issue of 8.91 crore shares of Rs 5 each, representing 10.05 per cent of the post issue capital base. Street expectations puts a valuation of around $8.5 billion which would be marginally lower than the latest PE deal involving telecom tower business(Bharti Infratel's 10 per cent stake dilution valued it at $10 billion).
Given the expected valuation of Reliance Infratel, the issue would be for about Rs 3,400 odd crore which would translate into per share price of around Rs 400. Incidentally, this would also be close to the issue price band of the Reliance Power IPO.
As is customary, at least 60 per cent of the issue will be allocated on a proportionate basis to QIBs, of which 5 per cent will be for mutual funds. Not less than 30 per cent of the issue will be available for retail individual bidders and not less than 10 per cent will be allocated to non-institutional bidders.
JM Financial, JP Morgan India, ABN AMRO Securities, Deutsche Equities, Enam Securities, ICICI Securities, Lehman Brothers Securities, Macquaire India and UBS Securities are acting as the book running lead managers to the proposed IPO. HSBC Securities, Kotak Mahindra Capital and SBI Capital are acting as co-book running lead managers. Law firm Amarchand & Mangaldas & Suresh A Shroff is advising Reliance Comm while Linklaters Allen & Gledhill Pte Ltd and Khaitan & Co are advising the book running lead managers and co-book running lead managers of the IPO.
