BANGALORE: Cellular service provider Spice Telecom plans to go for an initial public offering (IPO) by March end this year. The aim is to raise an amount of around $150 million to fund the company's expansion plans.

Spice Telecom chairman and managing director Dilip Modi said here on Wednesday that the company will offload about 15-20% stake to raise the required sum.

Spice Telecom, in which Telekom Malaysia holds a 49% stake, is part of Mcorp Global, a B K Modi company. Spice offers cellular services in Punjab and Karnataka. The company has applied for licenses to operate in a number of other circles. It is also awaiting licenses for national and international long distance services.

"The board, which met in Bangalore on Tuesday, cleared the IPO plans of Spice Telecom," B K Modi said. The company has a debt of around $260 million and revenues of about Rs 700 crore (2005-06). It has 2.5 million subscribers in India, out of the country's total subscriber base of over 100 million.

Recently, it won a Rs 100 crore contract from Indian Railways giving it the rights for a certain railway software enabling enquiries and ticketing. Before Telekom Malaysia entered the equation, Hong Kong-based Distacom had enjoyed 42% stake in Spice Telecom. This stake was then picked up by Ashmore Investment Management, a financial investor associate of Deutsche Bank. Subsequently, this stake was sold to Telekom Malaysia.

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