Reliance Communications to make listing on Monday
Mumbai, March 5: Anil Ambani-owned Reliance Communication Ventures Limited (RCoVL), the last of the four demerged companies from Reliance Industries Limited (RIL), will be listed tomorrow on both BSE and NSE stock exchanges for trading.
The event is like a ''dream come true'' not only for the promoters of the Reliance Group but also for over 23 million of RIL investors even before the separation of the group companies between the two Ambani brothers.
According to market analysts, though the valuation of the company is anybody's guess estimates, there are strong feelings that the listing of RCoVL would be an ''acid test'' for the younger Ambani scion before his ADA Group (Anil Dhirubhai Ambani) go for mega investment plan in near future.
That's why, Anil himself decided to ring the bell at the historic BSE hall for tomorrow for the maiden journey of the company into the public domain.
However, analysts placed the listing price above Rs 200 per share and thereafter, the range of trading would be between Rs 200 and Rs 300 per share at least for medium term.
An analyst from ShareKhan broking firm said that the pricing of the company is still a wild guess and can be in the range of Rs 207-260 for the next twelve months. This is based on comparison with its nearest rival Bharti Televentures Ltd, whose current stock price was hovering at Rs 408.45 per share on Friday (Bharti gained around 12 per cent last week to reach this high figure).
A leading borkerage firm felt that RCoVL could be listed around Rs 200, but he did not wish to give any price range for the telecom company in which Anil Ambani as promoter holds 37 per cent share and rest 63 per cent are held by the public.
''We believe that on the listing day during the week starting March six, the stock should trade between Rs 200-250 per share with a 12 month perspective,'' said the stock broking firm.
However, another trader said that it was impossible to guess the right price given the absence of information on long term financial track record of the company.
RCoVL is a holding company for the telecom business of the Anil Dhirubhai Ambani Group (RADAG) with holdings in Reliance Communication Infrastructure Ltd (RCIL), Reliance Infocomm (RIC), Reliance Telecom (RTL) and Flag Telecom.
According to company estimates, RCVL's net worth is Rs 11,000 crore as on December 31 last year. This figure has been arrived at after writing off Rs 4,500 crore on account of penalties, tax liabilities, bad debts and write offs.
Going forward, the shareholding structures of all the four holding companies (RCIL, RIC, RTL and Flag Telecom) under RCoVL are expected to be streamlined and may be merged into RCoVL.
RCoVL's cash profit from operations have been on the rise during this financial year touching Rs 720 crore during the third quarter ended on December 31, last year, as compared to Rs 362 crore in the second quarter and Rs 132 crore in the first quarter.
The company that comes very close to RCoVL in valuation and business model is Bharti Televentures. According to an analyst, ''in terms of size, revenue, Bharti's profitability is much higher than that of RCoVL.'' However, there has been some catching up over the last three quarters, he said, as economies of scale are improving and consequently, the enterprise value will also improve.
Also in terms of qualitative parameters, RCoVL and Bharti are more or less on the same platform with coverage of towns at 3,684 (RCoVL) and 3,300 (Bharti) and revenues per minute at 75 paise (RCoVL) and Rs 1.10 (Bharti).
All the shareholders of RIL got equal number of RCoVL shares on the demerger of the companies, which was completed on January 25 this year.
ADAG's other three companies demerged from RIL--Reliance Capital Ventures Ltd, Reliance Energy Ventures Ltd and Reliance Natural Resources Ltd (RNRL) were listed on the stock exchanges in the second half of February with last one listed on March one.