Tata Teleservices plans to raise $1 billion by selling 15-30% of its stake to private equity and strategic investors reports ET. Tata, as per the latest TRAI report, holds 35.41% of the CDMA market, the second largest in the sector after Reliance. The money raised will be used to finance its CDMA expansion and the launch of its GSM services. Currently Singapore based Temasek holds 9.9% for which it paid 1500 crores and Chennai’s C Sivasankaran holds 8% in TTSL (Rs 1200 crore). Siva is rumoured to be interested in selling his stake. Israeli telco Bezeq, who had entered India with a JV with HFCL and exited in 1999 by selling its stake in Fascel to Hutch, is apparently planning an India comeback with the Tata Tele investment.
TTSL currently has 21.74 million subscribers and recently added additional circles to its bouquet making it the third pan-India operator. More importantly, it recently announced a JV with Virgin, while the deal terms have not been disclosed, it will be interesting to note how the PE effects the arrangement. Needless to say, with the current state of the telco market expect a healthy premium to be attached to valuations.