The Anil Ambani Group firm Reliance Infratel adopted its current name, the third in the last seven years, a month before filing draft prospectus with Securities and Exchange Board of India, for its initial public offer that may help the company raise an estimated Rs 6,000 crore (Rs 60 billion).
The 'dormant' company became Reliance Infratel Ltd on January 4, exactly a month before it filed the draft red herring prospectus (DRHP) with the market regulator Sebi to issue about 9 crore (90 million) shares with a face value of Rs 5 each.
Reliance Infratel has filed the draft prospectus within days of another group company Reliance Power raising Rs 11,560 crore (Rs 115.6 billion) through a public issue that was oversubscribed 73 times, though its share prices on the day of listing declined to about Rs 372, against the issue price of Rs 450 per share.
Reliance Infratel began its corporate journey way back on April 16, 2001 as Reliance Communications Rajasthan Pvt Ltd, said the draft prospectus. It was transformed into a public limited company in 2004, and two years later changed its name to Reliance Telecom Infrastructure Ltd.
The name of the company was again changed to Reliance Infratel after promoters pumped in significant amount of money to raise its net worth from Rs 458,000 as on March 31, 2006, to Rs 100 crore (Rs 1 billion) an the end of 2006-07.
The net worth of Reliance Infratel, which according the DRHP remained a 'dormant company' until March 30, 2007, zoomed to Rs 4,940 crore (Rs 49.4 billion), possibly to make it fit for a mega IPO.
The summary of financial information provided in the DRHP showed that the net worth of the company, before it adopted the new name Reliance Infratel, was a mere Rs 80,942 as on March 31, 2003, dipping further to Rs 71,715 at the end of next year.
The net worth of the company remained static at about Rs 450,000 at the end of 2004-05 and 2005-06, before rising to Rs 4,940 crore (Rs 49.4 billion) in less than two years as on December 31, 2007, primarily because of capital infusion in the form of equity and other assets.
The company made a profit of Rs 154 crore (Rs 1.54 billion) for the nine-month period ending December 31, 2007, a year after it posted a small profit of Rs 327,000 and losses during the four preceding years, it said.
The DRHP also said that the authorised share capital of the company, which was only Rs 100,000 in 2001, was increased to Rs 500,000 in 2004, Rs 100 crore (Rs 1 billion) in 2006 and Rs 1,500 crore (Rs 15 billion) in 2007.
