Spice Comm raises Rs 528 cr via public offer

Spice Communications, a subsidiary of Telekom Malaysia, raised Rs 528 crore ($128 million) in an initial public offering (IPO) as investors tapped a market where subscribers almost doubled last year.

Each of the 113.1 million new shares was priced at Rs 46, the top end of the range offered, Spice told investors in an e-mail today. The sale was oversubscribed more than 37 times, according to data from the Bombay Stock Exchange, where the stock will be listed.

Spice and larger Indian rivals such as Bharti Airtel and Reliance Communications have attracted investors to the world's fastest-growing market. Spice, which covers Karnataka and Punjab, plans to spend $140 million in the next two years to expand its network.

"Spice should continue to enjoy some strong growth in the next two to three years,'' said Jeffrey Tan, an analyst at OSK Research in Kuala Lumpur. "Beyond that, it needs to gain a pan-India operator licence or consolidate with other operators.'' Tan rates Telekom Malaysia shares "neutral''.

The shares of Spice will probably be listed either on July 19 or July 20, Company Secretary Preeti Malhotra said in a telephone interview from the company's headquarters in Noida.

Spice plans to build networks beyond the two states currently covered by the company, Abdul Wahid Omar, chief executive officer of Telekom Malaysia, said on June 19. The domestic mobile-phone market is divided into 23 circles.

Telekom Malaysia, Southeast Asia's second-biggest telephone company, will own about 39 per cent of the Indian mobile-phone company after the share sale, Spice Chairman Dilip Modi said last month. New Delhi-based B K Modi Group and its affiliates will own 41 per cent of Spice following the IPO, he said.

Telekom Malaysia, Southeast Asia's second-biggest telephone company, will own about 39 percent of the Indian mobile-phone company after the share sale, Spice Chairman Dilip Modi said last month. New Delhi-based B.K. Modi Group and its affiliates will own 41 percent of Spice following the IPO, he said.