Ramesh Venkat, Group President Finance & Treasury at Reliance ADAG says that the equity value of tower company is $ 6.75 billion (Rs 27,000 crore). The company is eyeing 40,000 towers by March 2008 with 1 lakh tenants. They are going to have multiple tenancy on all the towers.

Most towers can host at least 4 tenants, which can be ramped up to 7. Reliance Communication will be the anchor tenant across all the towers. Venkat adds that advance rollout of Wimax by parent company will boost RTIL tenancy. They are looking at capex recovery at 14-15%, but the multiple tenants will increase that. They will also gain from the capex savigns and sharing of operatin expenses.

Yeterday, RCom had announced the sale of a 5% minority stake in its towers-subsidiary (RTIL) to a clutch of financial investors. The stake sale places RTIL's total equity value at US $ 6.75 bln.

ML has raise the price target on Reliance Communication to Rs 690/sh. "This is driven by 1) Rs70/sh value ascribed to external tenants on their tower subsidiary, 2) Rs15/sh towards the land for which RCom recently
received SEZ approval; and 3) Rs 605/sh for RCom’s core telecom biz, implying an EV/EBITDA of 13x FY09E, broadly on par with our target valuation for Bharti at Rs1000/sh."