Anil Ambani’s RCom shares spurt 45% in late trade, despite bond holders being in a huddle post default

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Updated: December 20, 2017 3:25:55 PM

Anil Dhirubhai Ambani Group’s debt-laden telecom company Reliance Communications surged 45% amid heavy trading volumes in the late afternoon trade on Wednesday.

The stock of RCom zoomed as much as 44.94% to hit the day’s high of Rs 18.51 on BSE. (Image: Reuters)

Anil Dhirubhai Ambani Group’s debt-laden telecom company Reliance Communications surged 45% amid heavy trading volumes in the late afternoon trade on Wednesday. The stock of RCom zoomed as much as 44.94% to hit the day’s high of Rs 18.51 on BSE while RCom rose 44.7% to Rs 18.45 on NSE for the reasons yet unknown. The stock of RCom witnessed massive trading volumes as more than 20 crore shares exchanged hands on both BSE and NSE with about 18 crore shares on NSE alone. Following a massive spurt in the share price of Reliance Communications, the company’s market capitalisation crossed Rs 4,000 crore from Rs 3,160.6 according to Tuesday’s closing price of Rs 12.77. At the day’s high share prices, the market capitalisation of Reliance Communications witnessed an appreciation of Rs 1,319.47 crore to Rs 4,480.06. 

Earlier yesterday, the Delhi-based Principal Bench of the National Company Law Tribunal (NCLT) has directed the Mumbai bench to hear the two related insolvency petitions filed by China Development Bank against Reliance Communication and Reliance Telecom together, PTI reported. Also, the bondholders of RCom have hired advisers after the company defaulted on US dollar bonds. “Bondholders of Reliance Communications Ltd., the embattled Indian mobile phone operator controlled by billionaire Anil Ambani, have hired advisers after the company defaulted on its dollar-denominated notes last month,” Bloomberg reported.

On 15 November 2017, Most shares of the Reliance ADAG tumbled sharply amid heavy trading volumes on Wednesday in the late afternoon trade, with the Anil Ambani group’s Reliance Communications shares falling to single digits for the first time ever. Shares of Reliance Communications fell 17% to hit an all-new record low of Rs 9.6.

Reliance Communications is struggling with a heavy debt burden amid the ongoing tariff wars in the telecom sector which has eaten into margins. Earlier last month, RCom posted 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. The total revenue Reliance Communications halved for the quarter ended 30 September to Rs 2,667 crore as compared to Rs 5,142 crore in the July-September period of 2016-2017.

RCom is reeling under a total debt of 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. With a net of debt of Rs 44,300 crore as of end-March, RCom is the most leveraged among listed Indian telecom companies. The telecom company has missed interest payments on two outstanding domestic non-convertible debentures.

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