Reliance Communications ' tower company IPO is likely within 2 years as part of the stake sale deal reports CNBC-TV18.
Sources say that all 7 investors in tower biz are financial investors and each investor has invested about USD 50 million in tower business. GLG (UK) & HSBC (UK) are among the 7 investors whereas rest are US-based.
GLG (UK) and HSBC (UK) are among the seven investors, while the rest were US-based they further added. RTIL has agreed to come out with an IPO within two years, which is part of the placement deal.
Yesteday, the teleom major had announced that a group of leading international investors across the US, Europe and Asia, had agreed to purchase 5% of the equity share capital of its 100% owned tower company, RTIL at an equity value of USD 6.75 billion (Rs 27,000 crore).
Most brokerages are pleasantly surprised by the kind of valuation in the stake sale of Reliance tower business, valuing it at USD 6.7 billon. Most brokerages estimated it anywhere between USD 2-4 billion. So huge upside are seen on the valuations.
The key reason for disparity is that the company has estimated the capex recovery between 11-14% whereas the brokerages estimated it at 11%. Assumption on the external occupancy has also been different. The company estimated external occupancy at 40% whereas the brokerages estimated it at 30%.
Most brokerages are keeping to the base estimates to keep some kind of margin safety. Price estimates given by the brokerage company range between Rs 600 to Rs 690 averaging at Rs 650 with ML being the most aggressive valuing it at Rs 690.
