Ambani-led companies' stocks shoot up on telecom deal buzz
Market sees RCom tower deal with Blackstone-Carlyle by next week.
The grand telecom partnership between the Ambani brothers was once again the talking point in the stock markets on Friday. In an otherwise flat market, shares of the Anil Ambani group companies shot up on buzz that Reliance Industries (RIL) may use the telecom towers of Reliance Communications (RCom) on rent for its 4G foray. The buzz also moved Mukesh Ambani-led RIL’s shares, which also ended higher.
According to the market buzz, the partnership will also act as a catalyst for private equity (PE) investors Blackstone and Carlyle to come in and buy out RCom’s tower assets as the tenancy prospects will improve. According to market sources, the exclusive negotiations for the long-talked-about PE buyout are in the last leg and likely to get announced as early as next week. The expected equity valuation for the 50,000 towers is expected to be Rs 17,000 crore, which would make it the largest PE deal in the country till date. Blackstone is likely to be the lead investor in the transaction. The transaction will provide much-needed relief to the highly leveraged RCom, which has close to Rs 32,000 crore debt on its books.
“Any announcement of a possible tie-up between the Ambani brothers is likely to be restricted to Reliance Communications. The buzz is that RIL may rent the towers of Reliance Communications (for its 4G roll-out) and after that the tower business may be sold out to private equity players,” said S P Tulsian, an independent equity analyst.
But that was not enough. There was additional speculation of even RIL buying into Aircel — again, buzz that keeps coming back. But on Friday, it moved the stock. RIL reclaimed the tag of India’s most valued company from Tata Consultancy Services.
When contacted, an RIL spokesperson said, “We don't comment on market speculation.” An RCom spokesperson did not offer any comment.
The Sensex ended marginally higher, led by buying in RIL. It closed at 15,867.73, up 10.65 points or 0.07 per cent. The 50-stock Nifty of the National Stock Exchange gained 4.15 points, or 0.09 per cent, to 4,754.1.