Reliance Communicaitons could see drop in price action soon: Prakash Diwan

Prakash Diwan, Head-Institutional Clients Group, Asit C. Mehta Investment Intermediates Ltd., in a chat with ET Now, gives his views on Reliance Communicaitons.

If telcos have to pay an additional amount for the spectrum auction in addition to the 1651 crores that they had paid earlier, how big a hit would it be for R Comm in particular?

This is a significant blow. It is an event that would impact the EPS directly and negatively. R Comm has been struggling in terms of the kind of rating that it gets vis-a-vis the other players. The divide among R Comm, Bharti and Idea is going to increase tremendously because of this negative news development for the simple reason that Bharti and Idea both have actually come through with this whole 2G issue much stronger.

Potentially the the kind of possibilities they have of a price hike in some of these circles, they could put Reliance way behind in terms of the numbers. Reliance itself could see some significant drop in price action very soon.