Spice Mobiles Ltd plans to raise Rs 700cr by sale of shares. The Board has approved to raise the funds by issuing FCCBs, GDRs and through private placement of shares with potential buyers.

The board has also approved the the revised scheme of amalgamation of Spice Telemeters with Spice Mobiles. The company did not disclose the details of the revised scheme of amalgamation.

Transaction Reference: BS

Spice Mobiles is a part of the BK Modi-led Spice Group. The company sells handsets in India under its own brand, but is planning to launch other brands in the country.

For this it has formed a JV with Malaysia's CSL. The new entity, in which Spice Mobiles has 65% stake, will own Asian smartphone brand Blueberry.

Spice Mobiles will also use CSL’s network to launch its existing products in markets such as Indonesia, Malaysia and Thailand.

Spice Mobiles reported a net profit of Rs 22.40cr in Q3 December 2009 as compared to a net loss of Rs 3.40cr in Q3 December 2008. The current price of Rs 43.60 discounts the company's Q3 December 2009 annualised EPS of Rs 12, by a PE multiple of 3.63.

In November 2009, the company announced its plans to start a manufacturing unit for mobile devices in the country with an initial investment of Rs 100cr. Earlier, it was manufacturing the devices in China.

Last month, Spice group had consolidated its telecom ventures by merging Spice Televentures with Spice Mobiles to form a new entity Spice Mobility which will invest Rs 1000cr over the next 2 years. The merger is w.e.f 1 January 2010.

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