Reliance Communications Ltd., the mobile phone operator controlled by billionaire Anil Ambani, plans to spin off its real estate business.
The new company, which will be called Reliance Properties Ltd., will be separately listed, according to an e-mailed statement today. All Navi Mumbai-based Reliance Communications shareholders will receive fully tradeable pro-rata shares in the new company, free of cost, the company said.
The preliminary value of the company’s real estate business, which includes 135 acres of land near Mumbai and about 4 acres in Delhi, is estimated at 120 billion rupees ($1.97 billion), according to the statement.
The decision to separate the real estate business is part of Reliance Communications’ strategic plan to divest non-core ventures and focus on its telecommunications business, it said. The number of wireless phone subscribers at India’s third-largest mobile-phone company by market value fell 19 percent to 123.70 million in April 2013, according to data compiled by Bloomberg.
Reliance Communications’s shares gained 1.2 percent on July 5. The stock has gained 79 percent this year, compared with a 0.4 percent gain in the benchmark Sensitive Index.
The company in April signed an agreement to let Reliance Industries, controlled by Anil’s brother Mukesh Ambani, use its nationwide fiber-optic network to start a fourth-generation broadband service.