Shares of Reliance Communications (RCom) fell as much as 15.11% to its all time low of Rs 21.95 on poor March-quarter earnings and worries over debt repayment.
Reliance Communications on Saturday reported loss of Rs948 crore for the fourth quarter, hurt by intense price war unleashed by newcomer Jio. It had registered net profit of Rs79 crore in the corresponding period of the previous year.
“The telecom sector in India has been very adversely impacted on account of “free offers, disruptive pricing and hypercompetition during 2016-17 by competitive intensity on a scale never witnessed before in the country,” Reliance Communications said in a statement.
According to a report in Economic Times, the Anil Ambani-owned mobile phone operator has defaulted on its loan servicing obligations with more than 10 local banks, some of whom have categorised the exposure as “special mention account” in their asset books.
The scrip of the company has fallen around 35% in May after rating agency after CARE downgraded the credit rating on some of RCom’s long-term and short-term debt. In the previous seven sessions, the stock dropped six times.
At 10:41 am, the stock was trading 12.6% lower as compared to 0.05% gain in the BSE Sensex. It hit a high and low of Rs 25.65 and Rs 21.95 in the morning deals.
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