Shares of Anil Dhirubhai Ambani Group's telecom company RCom pared gains on Friday after spiking as much as 65% in last three days until Thursday on news that Mukesh Ambani’s Reliance Jio may acquire its assets.
Shares of Anil Dhirubhai Ambani Group’s telecom company RCom pared gains on Friday after spiking as much as 65% in last three days until Thursday. Shares of Reliance Communications opened 2.39% higher at Rs 18.4 from its yesterday’s closing price of Rs 17.97 but within a 30-minute of trade, the stock of Reliance Communications started to fell. In the early afternoon trades, Reliance Communications shares slipped 4.73% to hit a day’s low of Rs 17.12 on BSE while the stock tumbled to day’s low of Rs 17.1 on National Stock Exchange. Shares of Anil Ambani’s debt-laden telecom company Reliance Communications have zoomed as much as 65% in just three days on news that Mukesh Ambani’s Reliance Jio may acquire its assets. The stock of Reliance Communications rose massively for the last three consecutive days with most of the gains booked on Wednesday’s trade.
“RJio is leading the talks to acquire all assets RCom intends to sell, while a number of Private Equity (PE) firms and other strategic investors are also in the fray. The company is also in talks with foreign lenders for co-development of its Dhirubhai Ambani Knowledge City (DAKC) campus in Navi Mumbai,” the Business Line reported citing an unidentified source. Following this news article, NSE and BSE sought a clarification from Reliance Communications to which the reply is still awaited. Shares of Reliance Communications have surged as much as 65.67% to a high of Rs 19.6 (made on 21 December 2017) in the last three-day period. Huge trading volumes have been witnessed in the shares of RCom since Wednesday. As at 1.25 pm, over 12 crore shares exchanged hands on both BSE and NSE with more than 10.75 crore shares on NSE alone.
Earlier on Wednesday, RCom zoomed as high as 45% in the late afternoon trades before settling up 35.23% at Rs 17.27. Following three-days huge spurt in the share price of Reliance Communications, the company has added about Rs 2,148.82 crore in the market capitalisation to Rs 5,420.45 from Rs 3,271.62, as per Tuesday’s closing price of Rs 11.83 now at the current market price of Rs 17.46, Reliance Communications’ market capitalisation was Rs 4,831.39 crore.
On Wednesday itself, BSE and NSE sought clarification from Reliance Communications Ltd with respect to a massive increase in share prices on Wednesday, following which Reliance Communications said “the Company cannot comment on changes in volume and price in the stock markets. Appropriate disclosures will be made in accordance with applicable regulations, as and when any disclosable event occurs.”
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. 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.