Reliance ADAG shares gained 4-20% on Tuesday as Anil Ambani's telecom company RCom net loss narrowed to Rs 130 crore for the quarter ended 31 December 2017.
Reliance ADAG (Anil Dhirubhai Ambani Group) shares gained 4-20% on Tuesday as Anil Ambani’s telecom company RCom net loss narrowed to Rs 130 crore for the quarter ended 31 December 2017. Reliance Communications on Monday reported a consolidated net loss of Rs 130 crore for the October-December quarter of the financial year 2017-2018, mainly on the account of closure of its loss-making mobile telephony business. Shares of ADAG’s including Reliance Communications, Reliance Naval and Engineering and Reliance Power rose 4-20% on Tuesday with the stock of RCom rising as much as nearly 19%. On a yearly basis, RCom’s net loss declined to Rs 130 crore in the fiscal third-quarter from Rs 531 crore in the same period in the financial year 2016-2017.
Sequentially, a sharp drop was seen in the consolidated net loss from Rs 2,712 crore in July-September 2017 period. “RCom’s planned exit from the consumer business has achieved more than the desired results. RCom has reduced its net loss by over 95%. Rcom expects to deliver even better financial performance in the coming quarters,” RCom Chairman Anil Dhirubhai Ambani said in a statement. Following a steep reduction in the net loss, shares of RCom jumped 18.9% to the day’s high of Rs 32.4 after opening up 2.38% at Rs 27.9. Shares of Reliance Naval and Engineering rose 4.84% to the day’s high of Rs 50.9 while Reliance Power gained 4.7% to the day’s high of Rs 48.95.
The company continues to operate business-to-business solution which comprises global and Indian enterprise, internet data centres (IDC), global submarine cable network and international long distance voice with about 40,000 global and Indian customers. Reliance Communications reported a decline of about 30.74% to Rs 1,176 crore for the quarter ended 31 December 2017 from Rs 1,698 crore it posted in the corresponding quarter in the financial year 2016-2017. “Rcom’s asset monetisation is on track to close by March 2018, subject to lenders’ consents and other regulatory approvals,” the statement said.
In a major development in December last year, RCom signed a definitive agreement with Reliance Jio for sale of towers, MCNs and fibre. The company will sell 4G services and 43,000 towers to Jio. The announcement comes just two days after Reliance Communications disclosed a new deal with the lenders under which nearly Rs 40,000 crore will be raised through the sale of assets, averting an imminent takeover by the 35 local and foreign banks. In the Reliance Communications presser held in late-December 2017, Anil Ambani said the company will exit the strategic debt restructuring plan with a zero write-off to lenders and bankers. Reliance Communications will be reducing its debt by monetising the assets of its wireless business and no part of the debt will be converted into equity under the new plan.