The company is raising almost Rs 750 crore from public at a floor price of Rs 12. Besides the domestic investors (including retail investors), foreign investors are also showing interest in the biggest equity IPO in the recent past. In fact, the company may give around 11 per cent stake to foreign institutional investors (FIIs), according to a top company official.

Hughes Electronics, Alltell of US and Ispat Group have already pumped in Rs 137 crore and may dilute their stake in the company.

The company is planning to offer a comprehensive range of telephony and Internet services using the broadband network. The company will first install the broadband telecom network in Mumbai and the adjoining city of Pune. Hughes Tele.com is also planning to expand the network to connect nine cities in Maharashtra and one or two cities in neighbouring Goa. The company is offering a package of quality telephony and Internet services to corporates, which can be used for applications like supply chain management and ecommerce. The company is targetting most of its revenues from telephony services for the initial two years. However, the contribution of Internet services to total revenues will increase over the years, according to the company. The company is also going to act as an ISP for which it has already applied to the Department of Telecom.

Besides, the company will also expand lines to 15,000 villages using wireless technology in two to three years time. For the Rs 3485-crore project, the company has tied up the debt part of Rs 1600 crore. The project involves expansion of the company's existing wireless and wireline telecommunications infrastructure, the construction of fibre optic cable network, digital switches, integration with existing network for provision of broad band telephony and wireless services, internet and advanced intelligent network (AIN) services, web-based application services and total business telecom services.

Of the project cost, Rs 15 crore is earmarked for land and building, Rs 532.5 crore for licence fees, Rs 2627.4 crore for network equipment, Rs 118.8 crore for finance costs, Rs 92 crore for contingency reserve, Rs 189.3 crore for capitalisation of pre-operative expenses, Rs 41.8 crore for deposits for switch/cell sites, Rs 62.5 crore for working capital requirements and Rs 195 crore for debt service reserve. The project will be financed through promoters' contribution of Rs 666.7 crore, public issue proceeds of Rs 886.4 crore, rupee term loan from FIs and banks of Rs 854 crore, contingency reserve of Rs 763 crore and vendor debt (Hughes) Rs 315 crore.

The company currently has a subscriber base of more than 27,000 lines in service and is expected to increase it to 3.9 lakh lines by 2004. For fiscal 2000, the company incurred a net loss of Rs 269.36 crore on total income of Rs 67.01 crore. For fiscal 2001, the company expects to more than double its turnover to Rs 185.76 crore and reduce net loss to Rs 221.03 crore. The bookbuilding portion is closing on September 5.