RCom to raise about $500 million through QIP

Reliance Communications (RCom), the country's fourth-largest operator by subscribers, is raising Rs4,300 crore through a Qualified Institutional Placement (QIP) issue and stake sale to promoters. The Mumbai-based company will use the funds to trim debt.

It's QIP issue opened on Tuesday.

The company, controlled by billionaire Anil Ambani, had earlier hired Edelweiss Financial Services Ltd and Axis Capital to manage the issue.

RCom, which straddles both CDMA and GSM services, wills raise Rs3,000 crore through the QIP and the remaining Rs1,300 crore through a preferential allotment of warrants to promoter groups at Rs150 each, the company said in a BSE filing.

The company's board passed a resolution approving issuance of 8.67 crore warrants to the promoters.

The company will offer the shares at Rs 142.13 apiece through the QIP, a 5 per cent discount to the floor price of Rs149.61, based on the formula prescribed by Sebi, it added.

The promoters would make an upfront payment of 50 per cent of the total Rs1,300 crore and the remaining 50 per cent by end of the current financial year.