Sistema Shyam Teleservices Ltd is planning to float an IPO to raise funds for expansion.

SSTL President and CEO - Vsevolod Rozanov said that the IPO may not hit the market in the next six months, but the company would start working on the draft red herring prospectus (DRHP) in a few weeks from now.

SSTL is a JV between Sistema of Russia and Shyam Group of companies. Sistema holds 73.71%,while Shyam Telecom holds 23.79% in the company.

The company has recently approved a share issue to raise $750 Mn. Sistema will issue 662.7 Mn shares to Russia's state property management agency as part of India's debt settlement scheme, and 228.5 Mn to its existing Indian shareholders.

The price for Indian shareholders was set at face value, while the Russian government will pay Rs 49.31. This deal would bring down Sistema's stake to 54% and Russian government would endup owning 20%.

Sistema Shyam Teleservices Ltd was founded in 1998 and has over 1 Mn users spread over Rajasthan, Tamil Nadu, Kerala and West Bengal. It obtained a pan India license in March 2008 and has launched its service in Mumbai yesterdayunder the brand name MTS.

Sistema Shyam entered a brand license agreement with Mobile TeleSystems (MTS) OJSC of Russia. The agreement with MTS does not include participation of SSTL, for launching MTS products, operations or services in India.

Shyam Telecom provides wireless coverage solutions. Shyam Telecom designs and manufactures Multi-Access Rural Radio, VHF-UHF Point to Multipoint Radios, Digital radios, Telephone Exchanges, and SCADA.