Shares in Reliance Communications surged as much as 15 per cent amid a broad rally on Wednesday. Billionaire Anil Ambani promoted Reliance Communications' shares have gained sharply since the annoucement of a Rs 1,200-crore deal with the telecommunication unit of Reliance Industries last week.
Traders said Reliance Communications' attempts to reduce large debts on its books are seen as a key trigger for the stock. Reliance Communications is reportedly in talks with Bahrain Telecommunications Co (Batelco) to sell 80 per cent stake in its subsidiary Reliance Globalcom. The deal is likely valued at around Rs 6,000 crore, reports indicated.
Batelco later issued a statement saying there was "no certainty" that they will pick up stake in Reliance Communications' subsidiary Reliance Globalcom.
Reliance Communications, India's No.3 mobile phone carrier by customers, had net debt of about $6.9 billion (Rs 37,000 crore) as of December, or more than five times its annualised operating profit, making it the most-leveraged Indian phone carrier.
Earlier this week, Morgan Stanley upgraded Reliance Communications to "overweight" from "equal-weight" on the back of the company's Rs 1,200 crore fibre optic network sharing deal with the telecom unit of Reliance Industries.
The investment bank raised its fiscal 2014 earnings estimates for Reliance Communications by 125 per cent as a result of the deal and says additional deals could cut net debt by Rs 7,700 crore.
Reliance Communications shares closed 13.5 per cent higher at Rs 73.20 on the Bombay Stock Exchange.
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