Reliance Communications (RComm) on Friday said the company has received shareholders’ approval for raising funds from institutional investors through sale of shares worth up to Rs 15,000 crore at the current market price.

?The shareholders have passed a special resolution by way of postal ballot, authorising the board of directors of the company to issue equity-related securities to qualified institutional investors, by requisite majority,? said RComm in a filing to the Bombay Stock Exchange (BSE). However, company officials could not be reached immediately for a comment on the number of shares to be sold and the amount of money to be raised.

The said issuance of securities is for strengthening the company’s financial position for planned participation in the upcoming auction of the radio waves for starting 3G and WiMax services across the country. As per analysts, Rcomm had planned to spend Rs 10,000 crore as capex for the 2009-10 fiscal, down from an earlier forecast of Rs 15,000 crore and it expects profit to improve due to the lower capital spend.

According to analysts, Rcomm would not dilute more than 52 crore shares for raising funds from institutional investors. The issuance of shares through the qualified institutional placement (QIP) would be capped at such a limit where the increase is not of more than 25% in the company’s issued and subscribed equity capital. This means that the company would not dilute more than 25% of its equity. Moreover, whatever number of shares the company dilutes, earning per share (EPS) would come down at the same rate. For example, if the company dilutes 20% of its equity then the EPS would come down by 20%. As of year ending March 31, 2009, the company has 206.4 crore shares.

RComm, which was mainly CDMA-based service provider, launched GSM services in January 2009 across 22 circles in the country. As of now, the company has a subscriber base of more than 80 million. RComm on Friday closed at Rs 292.4 on BSE, down 0.24%.

Green signal

•RComm has decided to sell shares worth up to Rs 15,000 crore at the current market price

•The shareholders of the company have passed a special resolution by way of postal ballot

•As per analysts, Rcomm had planned to spend Rs 10,000 crore as capex for the 2009-10 fiscal

•Whatever number of shares the company dilutes, EPS would come down at the same rate