Close on the heels of raising over Rs 11,000 crore (Rs 110 billion) through Reliance Power IPO, Anil Ambani group on Monday announced plans for an initial public offer of its tower business unit, which is estimated to raise about Rs 6,000 crore (Rs 60 billion).

The group's telecom arm Reliance Communications [Get Quote] said its tower business subsidiary Reliance Infratel Ltd on Monday filed the draft prospectus with market regulator Sebi for entering the capital market with a public issue of 8.91 crore (89.1 million) equity shares. The shares of face value of Rs five each would be offered at a premium to be determined through 100 per cent book building process, the company said in a statement.

The company would dilute 10.05 per cent stake through the IPO. The IPO proceeds, estimated at about Rs 6,000 crore (Rs 60 billion), would be utilised to fund development of passive infrastructure sites and for general corporate purposes.

According to company's DRHP, it would invest Rs 4,623.7 crore (Rs 46.23 billion) in setting up 16,000 towers in 2009. Earlier, in July last year, RCom had divested five per cent stake in Reliance Infratel to a clutch of global investors for Rs 1,400 crore (Rs 14 billion), putting the valuation of its tower business at about Rs 27,000 crore (Rs 270 billion). Since then, the market value of RCom has increased by 20-25 per cent. The estimated proceeds of Rs 6,000 crore (Rs 60 billion) would give Reliance Infratel a valuation of about Rs 60,000 crore (Rs 600 billion).

Reliance Infratel builds, owns and operates telecom towers and related assets at designated sites. It also offers these passive telecom infrastructure assets on a shared basis to wireless service providers and other communications service providers under long-term contracts.

The retail investors would be allotted 30 per cent of the total shares on offer in the IPO, while at least 60 per cent of the issue would be allocated on a proportionate basis to Qualified Institutional Buyers, of which 5 per cent would be available for allocation to Mutual Funds only.

The remaining QIB portion would be available for allocation to all the QIB bidders, including Mutual Funds, subject to valid bids being received at or above issue price. The non-institutional investors would be alloted at least 10 per cent of the shares.

JM Financial [Get Quote] Consultants Private Limited, J P Morgan India Private Limited, ABN AMRO Securities (India) Private Limited, Deutsche Equities India Private Limited, Enam Securities Private Limited, ICICI [Get Quote] Securities Limited, Lehman Brothers Securities Private Limited, Macquire India Advisory Services Private Limited and UBS Securities India Private Limited are acting as the book running lead managers to the issue.