S-Tel which is jointly owned by business tycoon and investor, Sivasankaran and Bahrain’s Batelco, have arranged for funds amounting Rs 2,206 crore. The funds include Rs 953 crore lent in form of loans from a consortium of banks and Rs 1,253 crore as equity capital from the Siva Group and Batelco.

The company has earmarked Rs 2,000 crore of these funds towards rolling out 2G-based mobile services. The remaining Rs 206 crore which are for now kept in reserves, will be used to fund expansion in other areas such as ISP services for which the company has received licence.

The consortium of banks who have extended loan facility to the company include IDBI, SBI, Canara Bank, Punjab National Bank, Central Bank of India, Allahabad Bank and Bank of Baroda.

“The funds will be used over a period of two-to-three years for fuelling growth of S-Tel’s business,” said S-Tel CFO Sanjeev Bafna. The company says that the banks were ready to extend loans of Rs 1,500 crore but the company eventually settled for Rs 953 crore.

S-Tel now plans to enter six circles namely Orissa, Bihar and Jharkhand, Himachal Pradesh, North East, Assam and Jammu and Kashmir by this year-end. “With the successful financial closure, we are set to launch our services in six circles over the current year and early next year,” S-Tel CEO Shamik Das added.