Reliance Energy Ltd., India's second-biggest utility by market value, will separate its road, metro rail, bridges and real estate businesses that have investments worth $4.6 billion planned along with partners.

The plan was approved by the board, the Mumbai-based company said in a statement to the Bombay Stock Exchange today. The businesses will be managed by a fully-owned unit.

The unit will help improve value of Reliance Energy, run by billionaire Chairman Anil Ambani. India needs to double spending to $500 billion on public works over the next five years to sustain record economic growth, Finance Minister Palaniappan Chidambaram said in New Delhi yesterday.

``Whenever they sell shares in this new company, valuations of Reliance Energy will get a boost,'' said R.K. Gupta, who manages the equivalent of $75 million at Credit Capital Asset Management in New Delhi. ``The group will be better leveraged to raise resources for these infrastructure projects that need huge investments.''

Reliance Energy, India's worst-performing benchmark stock last year, is the best performer in 2007, climbing 241 percent on plans to expand capacity 15-fold in five years. The stock rose as much as 83.15 rupees, or 4.8 percent, to 1,805 rupees apiece on the Bombay Stock Exchange and traded at 1,773.1 at 11:49 a.m. local time.

Spending

Reliance Energy may spend about 180 billion rupees in four railway, highway, real estate and bridge projects, said Venkatesh Somayaji, the New Delhi-based spokesman for Reliance Energy. Some of the projects are being implemented along with partners.

The company plans to spend about 65 billion rupees in developing a real estate property spread over 77 acres in Hyderabad in southern India. It plans to spend 23.6 billion rupees in a suburban railway network and 60 billion rupees on a bridge in Mumbai and another 32 billion rupees on highways, Somayaji said.

Reliance Energy's ``board has approved a proposal to further unlock shareholder value by transferring its infrastructure projects,'' to the unit, the company said.

Ambani on Sept. 30 approved an initial share sale in Reliance Power Ltd., a unit of Reliance Energy, to expand generating capacity and meet increased electricity demand. Reliance Energy and Anil Dhirubhai Ambani Group, Ambani's investment company, hold an equal stake in the unit.

The company plans to spend $15 billion to add 15,000 megawatts capacity, Ambani said on July 10. Its Web site says the current capacity is 941 megawatts.

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