Calcutta, May 24: Spice Communications is planning to hit the capital market with an initial public offering next month.

The mobile phone operator in Punjab and Karnataka is planning to raise $150 million or about Rs 600 crore. The issue may lead to the promoters diluting 20 per cent of their shareholding in the company.

Spice Communication is a 51:49 joint venture between the BK Modi group and Telekom Malaysia Berhad.

Sebi yesterday approved the offer. The price band will be announced shortly.

The company will now venture into national and international long-distance businesses. The telecom department has recently issued the letters of intent for the ventures.

With the Centre planning to allocate more spectrum to telecom companies, the company is sniffing more growth opportunities in the near future.

The IPO is likely to coincide with the DLF float and the follow-on offer of ICICI Bank.

Telekom Malaysia Berhad bought a 49 per cent stake in Spice for Rs 720 crore in March last year.