B K Modi to sell 24% stake in mobile venture

According to sources close to Modi, this move is a part of a bigger association that would see Sony and Modi getting together in a range of other businesses with the Japanese multinational.

"The Modi group is looking at merging its business with the Sony company at the every level. This started off with Sony's television business and now the mobile space. Sony Ericsson intends to acquire 51 per cent in Spice Mobiles. While Modi will offload 24 per cent the additional stake will be bought through the market," said a source.

Modi is in advanced stages of negotiations and the process should be completed wihin the next three months. Modi is believed to be quoting around Rs 80-100 a share. The association will further fuel the expansion of the Modi group's mobile store chain across the globe. The Modi group currently has 600 handset retail stores (which are part of Spice Mobiles) in India under the Hot Spot brand.

With this deal, Modi plans to increase its retail store presence to 5,000 across Israel and Indonesia, in addition to India by 2010, according to sources. Sources said the investment for each store will be around Rs 1 crore.

Meanwhile, Cellebrum Technologies, Modi's value added service division, has filed the draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) for an IPO . Cellebrum is looking at raising Rs 200-300 crore by going public.

The sources added that Modi's association with Sony started with his decision to acquire a stake in Sony TV in India.