RCom hits 52-week high on Rs 12,000 crore pact with Reliance Jio

MUMBAI: Anil Ambani-owned Reliance Communications (RCom) has signed a Rs 12,000 crore pact with Reliance Industries’s subsidiary Reliance JioInfocomm for sharing telecom towers.

The stock slipped in red after hitting its 52-week high of Rs 119.90 in trade today. At 11:36 a.m.; the stock was trading 0.7 per cent lower at Rs 117.25.

As per the pact, RCom will lease 45,000 towers to Rel-Jio which will help the latter to roll out 4G services. According to analysts, this deal is a big boost for RCom and will lower its debt burden.

As per reports, the valuation of Rs 12,000 crore is spread over lifetime of agreement. The two companies will jointly work to set up towers at new locations.

Mukesh Ambani, Chairman, Reliance Industries in the company’s 39th AGM yesterday said that the firm will increase staff in its telecommunications business unit to 10,000 next year from 3,000 currently.

Reliance Industries' Jio Infocomm will roll out telecom service on 4G technology next year.

"We have charted an ambitious plan for the next 12 months and we foresee making rapid progress over this period towards launching our services across India," Mukesh Ambani said.

Reliance Jio Infocomm is the only company to have nationwide permits for 4G broadband services, but is yet to start commercial services.

Shares of Reliance Communications have been on a run in the past two months in anticipation of a deal with Rel Jio and stake sale in its subsidiary Reliance Globalcom.

It has rallied over 131 per cent from Rs 51.1 level in a little over two months.

According to analysts, the stock may see some profit booking near current levels as the news is out. They see some more upside in the stock if the company manages to sell stake in Globalcom.