Shares of Anil Ambani’s debt-ridden telecom company Reliance Communications slipped as much as 5% on Monday on news of exclusion from BSE 200 index from next month. As a part of periodic shuffling, Asia Index, the S&P company which maintains major BSE indices, has reconstituted the indices and the changes will be effective next month 18 December 2017. The stock of RCom dropped as much as 4.95% at the day’s low of Rs 11.5 on BSE today. Last week, RCom shares fell heavily and made an all-time low of Rs 9.6 on BSE.
Reliance Communications stock which was once a constituent of the 30-share benchmark Sensex will now move out of the much broader BSE 200 index, following its continuous slide down the path of exclusion from key indices. Earlier in August 2011, Reliance Communications and Reliance Infrastructure, two shares of Anil Dhirubhai Ambani Group, were removed from Sensex. RCom shares were included in the elite Sensex index way back in 2006, just months after the company getting listed.
Reliance Communications is reeling under the immense pressure of debt amid the ongoing tariff wars in the telecom sector which has eaten into margins and is in the process of shutting down some of key business lines. Earlier last week, ADAG’s (Anil Dhirubhai Ambani Group) financing arm Reliance Capital said that it has about Rs 1,450 crore worth of exposure to RCom. In an interview to ET Now, Amit Bapna, CFO, Reliance Capital said that Reliance Capital has a total exposure of Rs 1,450 crore out of which Rs 1,000 crore is the loan given to RCom and its subsidiaries and Rs 450 crore is the corporate guarantee which is given on behalf of Reliance Infratel tower asset business and besides that there is no loan given to them.
RCom has also failed on US dollar bonds which is the first default by an Indian company in 15 months. “Reliance Communications Ltd., the Indian mobile phone operator controlled by billionaire Anil Ambani, failed to pay a coupon on its 2020 dollar notes before the expiry of a grace period on Monday,” Bloomberg reported citing an unidentified person familiar with the matter.
RCom has a total debt of about Rs 45,000 crore. Of this, Rs 25,000 crore is domestic debt and remaining Rs 20,000 crore is in the form of foreign loans and bonds. RCom has classified Rs 22,550 crore of borrowings as non-current liabilities. The telecom company has missed interest payments on two outstanding domestic non-convertible debentures. Earlier this month, RCom reported a consolidated net loss of Rs 2,709 crore for the July-September period versus a profit of Rs 62 crore in the same quarter a year ago.