Mumbai, June 7 (IANS) Bucking the general gloomy trend, the shares of Reliance Communications closed significantly higher on Indian bourses Monday, a day after its board approved a 26 percent equity sale to a strategic investor.
The shares of the telecom major, led by billionaire industrialist Anil Ambani, which had closed at Rs.168.15 Friday, ended Monday at Rs.175.90, up 4.61 percent. It had touched the day’s high of Rs.179 at one point, but shed ground due to profit taking.
This was the only scrip, apart from ACC, among the 30 stocks of the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) that ended in the green. ACC ended 0.91 percent higher at Rs.848.50.
In sharp contrast, the Sensex had a provisional ending at 16,781.07 points, down 336.62 points, or 1.97 percent, over the previous close at 17,117.69 points, data with the exchange showed.
The Reliance Communications scrip had risen 14.03 percent during the past week on reports that the UAE-based Etisalat was interested in acquiring a stake in the company, which has a subscriber base of 109 million on both GSM and CDMA platforms.
‘The board of directors of Reliance Communications has approved in-principle the induction of strategic or private equity investors into the company for an up to 26 percent equity stake at an appropriate premium,’ a company statement said Sunday.
The company, however, neither disclosed the name of the strategic buyer nor fixed any time frame for realising the proposal.
The speculation of stake sale started after Etisalat, which has been bullish on India and wants to be a major player in the country, withdrew from the third generation (3G) telecom airwaves auction after the bids surpassed the $2 billion-mark.
Such reports of stake sale – which indicated that US major AT&T and South Africa’s MTN were also interested in a stake – had seen the shares of Reliance Communications soar 14.03 percent during the week ended Friday at Rs.168.15.
An Abu Dhabi-based English daily The National had reported last week that Etisalat chairman Mohammed Omran had plans to acquire companies in India, which is the second-largest and the fastest-growing mobile market in the world.
In September 2008, Etisalat, which has over 100 million customers across 19 countries globally, had bought 45-percent stake in Swan Telecom for a cash consideration of close to $900 million.
The company’s Indian operations, now called Etislat DB, have also unveiled its tariff for telecom services in the country under the ‘Cheers Mobile’ brand name.
In July last year, Etisalat had entered into a 10-year long-term infrastructure sharing pact with Reliance Communications. The deal was worth an estimated $2.2 billion.
Reliance Communications, which has been in talks for an overseas partner or strategic sale for nearly two years now was earlier non-committal about such specific moves but also did not rule out such a possibility.
‘The company has been receiving various proposals from time to time from reputed international telecom companies expressing interest in acquiring a strategic equity stake in Reliance Communications,’ the company said last week.
‘The company evaluates such proposals in line with the company’s policy to constantly endeavour to enhance overall shareholder value,’ it said, adding it would disclose any developments at an appropriate time.
