Spice promoters may offload 20% stake

Promoters of Spice Telecommunications may dilute their stake by 20 per cent through the company's maiden public float that is likely to hit the market in a month.

B K Modi and Telekom Malaysia, both promoters of Spice, will reduce their stake by 10 per cent each to 41 per cent and 39 per cent, respectively, sources close to the development said.

The company is in the process of filing red herring prospectus with the Securites and Exchange Board of India (Sebi). Spice expects to raise around Rs 600 crore through the public offer. Enam and UBS are advising the company on the offer.

Spice Telecommunications has been in news for some time due to the reports of its merger with the Aditya Birla Group arm Idea Cellular. A section of analysts believed the public float would help the promoters to ascertain the valuation of the company ahead of the merger. However, some observers said the merger may not take place if Spice managed to fulfil its fund requirements through the public float.

According to market analysts, Spice IPO would hit the market in July, after big tickets issues such as DLF and ICICI Bank are over.

International news agencies reported that Telekom Malaysia was open to the possibility of merging Spice with Idea Cellular. "We're open to everything," Telecom Malaysia's CEO Yusof Annuar Yaacob was quoted as saying last week.