Rel Comm market cap crosses Rs 78,500 cr

BS 200 SCORECARD

The Anil Ambani-controlled Reliance Communications has crossed the market capitalisation of an all-time high of Rs 78,500 crore growing nearly by 50 per cent in less than three months.

According to a company spokesperson, the data available in the public domain shows the market capitalisation at over Rs 78,500 crore.

Starting at a market capitalisation of Rs 53,000 crore and a share price of Rs 260 on July 31, 2006, a day of previous quarterly result announcement, the market capitalisation of the company has grown by close to 50 per cent in less than three months.

The company has added over a million subscribers for each of the last three months adding a total of close to 3.35 million customers on their network.

Reliance has seen a 187 per cent growth in monthly net additions during the past 12 months and claimed to be the fastest growing company compared with the other cellular operators. According to industry estimates, Reliance Communications is the only telecom company which has crossed the Rs 75,000 crore market capitalisation mark within eight months of listing.

Even the leading analysts such as Macquerie, Morgan Stanley, Lehman Brothers, JP Morgan, Merryl Lynch and Citigroup have raised their price targets over the last few weeks thus expecting better performance from the Anil Ambani promoted Reliance Communications.

The company is announcing its second quarter result tomorrow.

Reliance Communications, which is offering CDMA-based mobile service through the country along with GSM operations in seven circles, has already announced its plans to expand in GSM operations and has also applied for spectrum from the Department of Telecom (DoT).

In its run up to expand GSM-based operations, the company has entered into an agreement with leading private operators, including Hutch and Idea to share their infrastructure which would not result in saving cost but also would ensure faster roll out of services after it gets frequency in the GSM band.

As the company looks at increased sharing of passive infrastructure, the capital and operational expenditure reductions would enhance the profitability, say analyst reports.

The global business of the Reliance Communications is one of the key areas which is expected to see robust growth, with the launch of FALCON cable system whose pre-sales bookings, now adjustable as revenues, received phenomenal response from Gulf Carriers, the company sources said.

With National and International long distance revenues making significant additions quarter after quarter, some of the aggressive tariff plans have added significant volume growth to the company's 80,000 km long NLD and 65,000 km long ILD network.