When Mukesh Ambani's Reliance Jio Infocomm announced a Rs 1,200-crore deal with younger brother Anil Ambani's Reliance Communications in April, RCom shares shot up 11 per cent. But on Friday, after the two companies inked a much bigger Rs 12,000 crore deal, RCom shares actually fell 1.4 per cent to close at Rs 116.40. RCom underperformed the broader Sensex, which closed 0.5 per cent lower at 19,429. RIL declined 1 per cent to Rs 784.60.
Here are the reasons behind the fall in RCom shares
Lack of surprise: Markets have a tendency to buy on rumour and sell on news. Traders expected a bigger deal between RIL and RCom ever since the two companies signed a Rs 1,200 crore fibre optic network sharing deal in April this year. A tower-sharing deal between RIL and RCom appears more likely than before, Bank of America Merrill Lynch had said in a note post the April deal. (Read: RIL- RCom deal: How it impacts the telecom space)
RCom shares have run-up sharply: Since April 2, when the fibre optic network sharing deal was announced, RCom shares have gained 87 per cent from Rs 63.30 on April 2 to Rs 118 on June 6. The BSE Sensex has gained 2.5 per cent over the same period. (Track stock)
RCom unlikely to get the money in one go: RCom will lease up to 45,000 towers and will get more than Rs 12,000 crore over the lifetime of the contract, Reuters said. Deven Choksey, managing director of KR Choksey said investors would have been happier if the entire sum of Rs 12,000 crore would have come in one go.
