The telecoms unit of Escorts Ltd, flagship of the diversified Escorts group, plans to raise $150 million to roll out cellular services in three states, a top company official said on Friday.
Escorts Telecommunications Ltd, a wholly-owned company of New Delhi-based Escorts, has a license to offer cellular services in Rajasthan, Himachal Pradesh and a part of Uttar Pradesh.
ETL will fund its cellular foray through $75 million in debt and an equal amount in equity placements with a clutch of foreign investors who already have a strong presence in India's cellular sector.
"We've got International Finance Corp to support this particular venture and other foreign investors are still being finalised," Rajan Swaroop, chief executive officer of ETL, told Reuters.
"IFC will hold about 20 per cent equity in Escorts Telecom."
Of the equity component of $75 million, the company hopes to raise about $30-40 million from foreign investors and the rest from Escorts Ltd.
India's booming cellular sector, which has more than 11.8 million users, has attracted a host of global firms such as Singapore Telecommunications that owns 16 per cent stake in the country's largest cellular services firm, Bharti Tele-Ventures.
Another Escorts group firm, Escotel Mobile Communications Ltd, offers cellular services to 577,000 users in Kerala, Haryana and a slice of Uttar Pradesh.
Escotel, 49 per cent owned by Hong Kong's First Pacific Co Ltd, recently sold its cellular license for Punjab to the Indian mobile unit of Hutchison Whampoa conglomerate.
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