By Sandeep Gurumurthy, CNBC-TV18

CNBC-TV18 learnt from sources that SEBI has given clearance for the Reliance InfraTel IPO (subsidiary of Reliance Communications and looks after the tower business). The company is planning to dilute 10% equity and is seeking a valuation of about Rs 5,000 to Rs 6,000 crore for that 10% equity. This is a significantly higher than what it fetched when it divested 5% stake (Rel Comm holds 95% stake) at Rs 1400 crore to PE investors in July 2006 so that would value Reliance InfraTel about Rs 28,000 crore. Now they are valuing the company at around Rs 50,000 crore to Rs 60,000 crore, the difference is because much has changed and there is now certainty to the GSM rollout.

So for every tower that the company has, there is an added tenant which is Reliance GSM, and also the company has expanded its tower base significantly. Back then in July 2006 it had about 13,000 towers, now it has about 35,000 towers and is hoping to add another 20,000 towers by the end of this Fiscal, and also it is looking at active infrastructure sharing agreements with other players. It is very close to signing the infrastructure sharing pacts with Shyam Telecom and BSNL so because of these triggers the company is seeking a higher valuation. There is no word yet on when this IPO will hit the markets, we are given to understand that it will be later this year but the exact timing is yet to be worked out.