Modi wants Rs 80 per Spice share

In the wake of enquiries from global telecom players and private equity majors, BK Modi, the US-based billionaire who owns 40.80 per cent in Spice Communications, has asked bidders to raise the price by as much as 33 per cent to entice him for a sale.

Modi is seeking a price of Rs 75-80 a share as against his earlier demand of at least Rs 60, sources involved in the negotiations said, declining to be identified.

"We are getting enquires from many companies who are even ready to pay a bigger price," he said. He, however, did not divulge the names of the companies the Modi family was in talks with.

Spice Communications Chairman BK Modi is seeking a higher valuation for his 40.80 per cent stake even as the buzz about a merger with Idea Cellular is doing the rounds.

The increase in the offer price raises the valuation of the BSE-listed company's market capitalisation to Rs 5,174.48 crore (at Rs 75) and Rs 5,519.44 crore (at Rs 80). This is in comparison with the earlier market cap of Rs 4,139.58 crore at Rs 60 a share. The share in Spice Communications rose 2.40 per cent to close at Rs 53.20 on Monday. At this price, the company's market capitalisation stood at around Rs 3,670.40 crore.

Modi is the chairman of Spice Communications, which provides GSM services under the Spice Telecom brand. Reports suggested that Spice Communications was in talks with Bahrain Telecom, even though this could not be confirmed.

Meanwhile, Spice Mobile, the handset division of Spice Communications, is launching its GSM phones priced Rs 599 in Bangalore on Tuesday. Branded as the People's Phone, the company is expecting to capture the mass market with the launch.

The firm expects to sell over one million of these handsets in India and 10 million globally over the next 12 months. Chinese and Taiwanese players offer mobiles around the same or lesser prices as well.

The phone lacks the SMS function, unlike the inexpensive CDMA mobiles from Reliance Communications and Tata Indicom, and does not have a display screen. Spice Mobile is planning to distribute the handsets through grocery stores, fertiliser and seed outlets and railway station kiosks.