Reliance Communications has valued its tower business RTIL at Rs 27,000 crore. The company values RTIL's shares at Rs 135 per share for shareholders. RTIL's enterprise value was pegged at $9 billion by March '08.

RTIL has 14,000 towers and Reliance Communications is planning to increase the numbers to 23,000 towers in next six months. The company is expanding its coverage from 10,000 towns and 3,00,000 villages to 25,000 towns and 6,00,000 villages. RTIL has a net worth of Rs 4,700 crore. Its capex of Rs 8,000 crore will be completed by March 08.

Reliance Communications holds 95% stake in RTIL at Rs 26,000 crore. The company has commitment for 5% stake USD 337.5 milion or Rs 1,400 crore. The company will have Rs 1200 crore capital gains.

The company expects a minimum investment of Rs 40,000 crore for 3G and 4G Services.

The company sees future growth from 'C' circle. It needs more infrastructure expansion to sustain seven million subscribers addition per month. The company needs minimum of 15,000 new sites for 3G and 4,000 new sites for 4G.

Analysts say that in just over a year, Reliance Communications has managed to carve out a company almost as large as it was last year. Reliance Tower Infrastructure Limited, or RTIL, - the hived off tower business of Reliance is valued at Rs 27,000 crore and will boost the valuation of other telecom infrastructure companies as well.

Reliance Communications has sold a 5% stake in Reliance Tower Infrastructure for Rs 1,400 crore. That’s an enterprise valuation of Rs 27,000 crores. This 5% has been placed with seven hedge funds and private equity players from the US, Europe and Asia. Sources say that HSBC, Deutche and Tiger could be in the list.

RTIL's equity valuation is nearly 25% of Reliance Communications’ current market cap of Rs 1, 60 000 crores. And Reliance is not stopping here.

“We have interest from other investors and will get a higher price for a stake,” said Anil Ambani, Chairman, Reliance Communications.

Reliance's tower company will now look at an IPO, maybe by the end of this fiscal. This is a part of Reliance's effort to unlock shareholder value.

Reliance's tower company aims to operate 40,000 towers by March ‘08 with over 1lakh tenants. It claims that this will make it the largest tower company in terms of tenancies. But in terms of revenues and valuations, it may take some more time for Reliance to catch up with global giants like the American Tower Company and Crown Castle.

Industry experts say this valuation is higher than expected, but Reliance would have got the first mover advantage. This deal is likely to have a ripple effect on other telecom infrastructure companies, like Bharti, that could see atleast a 10% upside in its valuations. It will also improve the valuations of telecom companies that are still to hive off their infrastructure units–at least in the short run.