Reliance Infocomm In No Hurry For IPO Right Now

Mumbai, April 29 | Updated: Apr 30 2004, 05:30am hrs
Reliance Infocomm is in no hurry to go for an initial public offering (IPO) and will wait for the appropriate time before unlocking value, said Reliance Industries Ltd (RIL) vice-chairman and managing director Anil Ambani.

Mr Ambani was replying to a question on whether Reliance Infocomm would go for an IPO in 2005. We believe that the value of Reliance Infocomm will be reflected much in the future. We are planning to be in 5,000 towns by March 2005 and our broadband products would also roll out, said Mr Ambani.

Reliance Industries, which has already put in Rs 12,000 crore, will not provide further equity infusions into Reliance Infocomm. RIL will not make further investments in Reliance Infocomm. That is behind us. Reliance Infocomm will fund its requirements through cash generation as well as ability to raise debt, said Mr Ambani. RIL holds 45 per cent stake in Reliance Infocomm.

Reliance Infocomm has reported a net loss of Rs 390 crore in 2003-04 and RIL has taken a hit of Rs 265 crore. This is the first time that RIL is including Reliance Infocomm in its consolidated results.

Reliance Infocomm has built capacity to handle 40 million CDMA (code division multiple access) subscribers. Currently, it has 7 million subscribers with 22 per cent mobile market share, Mr Ambani said.

The company will expoand its network to 3,800 more towns by March 2005, taking the total locations covered to 5,000.

Reliance Infocomm enjoys 20 per cent market share in the incoming international long distance minutes and has an average revenue per user (ARPU) of Rs 523 per month.