New Delhi: Mukesh Ambani-led Reliance Industries Ltd. (RIL) on Friday agreed to acquire Infotel for Rs 4,800 crore in a deal that values the Mahendra Nahata group Internet service provider at about Rs 5,000 crore.
As part of the deal RIL would infuse Rs 4,800 crore in the company as fresh equity capital to gain 95 per cent stake, the company said in a statement.
Announcement of the deal came within hours of Infotel emerging as the sole winner of broadband spectrum for the entire country for Rs 12,872 crore.
This marks Mukesh Ambani group's entry into telecom sector in less than a month of he and his younger brother Anil reaching a truce by ending all the no-compete agreements to enable each other an opportunity to enter and invest in areas hitherto barred under the family settlement reached in 2005 for division of Reliance empire.
RIL will invest Rs 4,800 crore by way of subscription to fresh equity capital at par to be issued by Infotel Broadband, the company said in a statement.
The share prices of both HFCL (promoted by Mahendra Nahata) and HFCL Infotel (promoted by son Anant Nahata) on Friday rose by the maximum limit and closed at Rs 11.39 and Rs 10.14 a share respectively. RIL's shares also surged over three per cent to close at Rs 1,046.25 a share.
Commenting on the initiative, RIL Chairman and Managing Director Mukesh Ambani said: "We see this as the next wave of value creation opportunity in the wireless broadband space. We believe this will pole-vault India's economy into the digital world at an accelerated pace while creating next generation tools that will enhance productivity and create world-class consumer experiences."
RIL said that BWA services can provide an opportunity to be in the forefront among the countries providing world-class 4G networks and services.
"A single 20 MHz spectrum when used with Long Term Evolution (generally known for 4G technology) has the potential of providing greater capacity when compared to existing communication infrastructure in the country," the company said.
In the BWA space, no other player could bag pan-India spectrum. Bharti Airtel and US-based Qualcom won four circles each, while Aircel bagged spectrum in eight circles.
There are reports that RIL was also talking to a new telecom licencee, Videocon Mobile, for a possible stake in the company. Videocon's share also went up by 0.40 per cent to close at Rs 22.20 a share.
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