Malaysia's biggest telecommunication operator Telekom Malaysia (TM) has started moves to list its partly-owned mobile operator Spice Communications on India's stock exchange, the company said.

Spice "kick-started a proposed listing on the Indian bourse" by filing a draft prospectus for an initial public offering with the Securities and Exchange Board of India, it said.

The draft prospectus "outlines the intention to raise funds though an initial public offering of 137.985 million shares through a full book building process," Telekom Malaysia said in a statement late Wednesday.

The proceeds of Spice's IPO will be used to help pay its long-term debt, meet capital expenditure requirements and pay for long distance service and other license fees, it said.

Telekom holds a 49 percent stake in Spice through its investment holding company TM International, with the other 51 percent held by Indian company Modi Wellvest Private Limited (MWPL).

Telekom said both companies would dilute about 20 percent of their holdings and that post-listing, MWPL's and TM's stakes will be reduced to 40.8 percent and 39.3 percent respectively.

Telekom bought its stake in Spice in June last year, a move it said would deliver a foothold in the Indian telecommunications market, one of the fastest growing in the world.

It said Spice as of Dec 31 was the second-largest mobile provider in the Indian state of Punjab and the sixth-largest in Karnataka state.

Spice has a customer base of some 2.45 million people in the two states, and has embarked on a pan-India expansion strategy, applying for licenses in additional states and to provide domestic and long-distance call services.