Shares in India's second-largest mobile services firm jumped to a record high after Ambani said the placement of the 5 per cent stake in Reliance Telecom Infrastructure Ltd (RTIL) had raised 14 billion rupees, a big premium to analysts' expectations.

"Our strategy to create a separate company for the infrastructure business has resulted in tremendous unlocking of value for shareholders," Ambani said.

The RTIL stake was sold to a clutch of leading institutional investors in the United States, Europe and Asia, he said, adding the company was evaluating a possible initial public offering or further strategic equity placements.

"The valuation is a huge positive surprise," said Shubham Majumder, telecom analyst at Macquarie Research, which had valued RTIL at USD 4.5 billion.

Reliance Communications, which lags leader Bharti Airtel Ltd, planned 80 billion rupees of capital expenditure in the fiscal year ending March 2008 to add another 23,000 telecom towers to its existing network of around 14,000 towers, Ambani said.

"We see a huge upside to the Reliance Communications stock," said Majumder, who has an "outperform" rating on the stock which tops the list of 57 Asia-Pacific telecom stocks that Macquarie tracks.

Shares in Reliance Communications jumped as much as 3.5 per cent to a record high of 586.90 rupees.

India is the world's fastest-growing mobile services market, with more than 6 million subscribers signing up each month, lured by tariffs as low as one U.S. cent a minute and the extension of networks to rural areas as operators move away from cities.

Reliance Communications said on Monday it had agreed to buy U.S.-based managed Ethernet services provider Yipes for USD 300 million, and looking for more international buys.

It said on Monday it was also considering a private placement and/or an overseas share issue for it unit Flag, which operates its under-sea cable network.