Spice Tele files for IPO, plans to raise $150m

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Spice Telecom, which currently offers mobile services in Punjab and Karnataka, on Monday filed the draft red herring prospectus, DRHP with Sebi to mop up over USD 150 million from the capital markets.

The company will offload about 20% stake. Currently, the promoters (Mcorp Global) hold 51% stake with Telecom Malaysia holding the remaining 49%, but post-listing their shareholding will come down to 40.8% and 39.2%, respectively.

As per the DRHP filing, Enam Financial Consultants is the book running lead manager for the float. Spice Telecom will issue 137 million shares of Rs 10 each, of which 2 million is reserved for its employees.

Spice Telecom will use the proceeds from its IPO for part payment of its long-term debt, payment towards national and international long distance (NLD/ILD) licences fees, capital expenditure requirements, other general corporate expenses and also to meet the expenses of the issue.

Chairman and managing director of Spice Communications Dilip Modi said the capital raised would cater to the company's expansion plans. "We have applied for cellular licences for the remaining 21 circles in the country. Our expansion to these circles will depend on spectrum availability. We will also be exploring the mobile virtual network operator (MVNO) route for expansion into more circles," he said.

"Initially our plan is to set up base infrastructure for NLD/ILD capacity of 30 million minutes per month across 15 locations in India," he said.

"Initially our plan is to set up base infrastructure for NLD/ILD capacity of 30 million minutes per month across 15 locations in India," the company said. On the ILD front, it has proposed to set up three international points of presence (PoPs) in US, UK and Singapore. "We have received quote of Rs 101 million from Wipro for NLD requirements and Rs 60 million for ILD requirements. We will give orders to the equipment suppliers only after the receipt of NLD/ILD licence," the company added, reports The Economic Times.