RCom slips, GTL Infra gains on failure of merger deal

MUMBAI: Shares of Anil Ambani group firm Reliance Communications took a beating while GTL Infrastructure erased its early losses to settle in the green on BSE after the two companies called off the tower business merger deal.

Both the companies today said that a proposed Rs 50,000-crore deal to merge telecom tower assets of RCom's subsidiary Reliance Infratel with GTL Infrastructure has failed to materialise.

Reacting to the failure of the deal, shares of RCom slipped 0.31 per cent to settle at Rs 162.90 on the Bombay Stock Exchange (BSE). During the day, the scrip had witnessed a fall of 1.77 per cent to hit an intra day low of Rs 160.50.

"This move is not surprising as the deal was overvalued and the huge debt in the balance sheets of RCom was a big concern for GTL Infra," Geojit BNP Paribas Assistant Vice President Gaurang Shah said.

The RCom counter lost ground on National Stock Exchange too, and closed at Rs 162.95, down 0.35 per cent, from the previous close. In terms of volume, over 99 lakh shares were traded on the bourses.


According to the sources, the deal would have helped RCom reduce its Rs 33,000 crore debt by Rs 18,000 crore. R-Infratel's parent company Rcom has begun searching for other investors for selling its tower assets.

However, shares of GTL Infra snapped its early losses and closed 0.88 per cent higher at Rs 45.60 on the BSE. Following the cancellation of the deal, the counter had lost over 6 per cent in the first half but later recovered as the investors made value buying.

Marketmen said that the shares of GTL fell in the morning trade as the investors were nervous but then fresh buying was witnessed in the counter at lower levels.

Meanwhile, the 30-share benchmark sensex remained firm throughout the day and finished 339 points, or 1.86 per cent higher, at 18,560.05 points.

On June 27, the boards of GTL, RCom and its subsidiary Reliance Infratel had given in-principle approvals to the Rs 50,000-crore (USD 11 billion) merger deal to create the world's largest independent telecom infrastructure company, neither owned nor controlled by any telecom operator.