Tuesday, April 9, 2013

Reliance Communications & Reliance Industries to share Fibre Optic Network!

Reliance Communications Ltd - India’s second largest telecom operator is currently in the news for a deal between Reliance communications ltd and Reliance Industries ltd in which the latter would be using the fibre optic network of Reliance Communications. The deal is expected to be benefitting both the companies. The news triggered the surging of Reliance Communications Ltd. on NSE and BSE. Presently the stock is trending petite and saw a gain of 7.3%. According to the last 52-week price change dynamics, it was perched lowest at Rs.46.55 and highest at Rs. 91.85.

Moreover, a bullish feature has been created for Reliance Communication with Morgan Stanley investment bank upgrading the company’s status from ‘equal weight’ to ‘overweight’. It is the Rs 12 billion fibre optic network sharing deal that raised the stature of the company. Furthermore, the company’s fiscal earning is estimated to rise by 125 percent in 2014. Additional deals, according to Morgan Stanley, could cut the company’s net debt by 77 billion rupees. Morgan Stanley upgraded Reliance Industries to "overweight" from "underweight" earlier in March '13 where it raised it's price to 961 rupees from 798 rupees.

Also, the market sentiment for Reliance has also improved on the fact that the friction between the Ambani brothers seems loosing with the sharing of fibre optic network giving advantage to both Reliance Communications as well as Reliance Industries.

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