In a regulatory filing with the stock exchanges, the company said after the de-merger of Reliance Infratel, it will be a company that is not controlled by any telecom operator and would unlock value for existing shareholders.
"I am delighted that this endeavour will greatly benefit Reliance Communications through substantial debt reduction and enhanced financial flexibility," Anil Ambani said in a statement.
"This proposal will be implemented through a de-merger or other suitable value-creating options, with the consideration to be received in a combination of cash and stock," the company said in the regulatory filing.
With this development, the markets expect the proposal for an initial public offer by Reliance Infratel to be shelved. The statement said the proposal for de-merger was expected to be wrapped up shortly.
The proposal is primarily intended at attracting the potential customers among those who won the auction for airwaves for third generation telecom and broadband access services by ensuring there is no conflict of interest with an existing player in the business.
"The proposal will also facilitate consolidation in telecom infrastructure space leading to scale benefits and operational synergies," the company said, adding: "Consideration is to be received in a combination of cash and stock."
The group said it was in advanced talks with several domestic and international players to offload the stake in not only Reliance Infratel but also Reliance Communications -- a development that had seen its stock prices soar nearly 35 in the past three weeks.
The formal announcement Monday came after market closed. The Reliance Communications scrip closed 3.71 percent higher at Rs.179.
Since the beginning of this month reports said the UAE-based Etisalat was interested in acquiring a stake in Reliance Communications, which has a subscriber base of 109 million and offers mobile services on both GSM and CDMA platforms.
The speculation of stake sale was reinforced after Etisalat, which has been bullish on India and wants to be a major player in the country, withdrew from the third generation (3G) telecom airwaves auction after the bids surpassed the $2 billion-mark.
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