Reliance Capital rose 2.86% to Rs 431.85 at 15:19 IST on BSE after the company said it will reduce debt by Rs 1900 crore through value unlocking in radio and TV businesses.
The announcement was made during trading hours today, 23 November 2016.Meanwhile, the BSE Sensex was up 86.49 points, or 0.33%, to 26,047.27.
On BSE, so far 5.90 lakh shares were traded in the counter, compared with average daily volume of 5.97 lakh shares in the past one quarter. The stock hit a high of Rs 444.80 and a low of Rs 420.15 so far during the day. The stock hit a 52-week high of Rs 595.70 on 23 September 2016. The stock hit a 52-week low of Rs 303.60 on 12 February 2016. The stock had underperformed the market over the past 30 days till 22 November 2016, falling 23.28% compared with the 7.87% decline in the Sensex. The scrip had also underperformed the market in past one quarter, falling 13.95% as against Sensex's 7.48% decline.
The large-cap company has equity capital of Rs 252.63 crore. Face value per share is Rs 10.
Reliance Capital announced value unlocking in the radio and TV businesses that will reduce its debt by approximately Rs 1900 crore upon final completion of stake sale transactions These transactions form part of Reliance Capital's stated strategy to reduce leverage and exposure in non-core business of media and entertainment.
Reliance Broadcast Network (RBNL), the largest operator of FM channels in India, has signed definitive and binding agreements with Zee Media Corporation (ZMCL) to sell 49% stake in its radio broadcast business. RBNL runs the largest network of FM Radio channels in India under the brand name of 92.7 Big FM that reaches out to 45 cities, 1200 towns and over 200 million people. The company shall be transferring the 45 operational and 14 new channels into two special purpose vehicles (SPVs) respectively and ZMCL shall acquire 49% stake in each of these two SPVs. Both companies shall also have a call/put option for the balance 51% stake in both the SPVs after the stipulated lock-in period.
Simultaneously, Zee Entertainment Enterprises (ZEEL), a separate entity under Zee Group, will acquire 100% stake in the Reliance Group's general entertainment TV business. The General Entertainment TV broadcasting business currently comprises of two channels - Big Magic and Big Ganga. Big Magic is a Comedy channel catering to Hindi speaking markets while Big Ganga is a leading Bhojpuri entertainment channel catering to audience in Bihar, Jharkhand and Purvanchal. Both these channels would be merged into ZEEL as part of this transaction.
The transaction pegs the combined enterprise value of radio and TV business at approximately Rs 1900 crore. The entire proceeds from the stake sale would be used to reduce Reliance Capital's debt by approximately Rs 1900 crore upon final completion of stake sale transactions. Both these transactions have been approved by the boards of respective companies and are expected to be completed by next year, subject to applicable approvals.
On a consolidated basis, net profit of Reliance Capital rose 1.20% to Rs 253 crore on 111.89% rise in net sales to Rs 4846 crore in Q2 September 2016 over Q2 September 2015.
Reliance Capital, a part of Anil Ambani led Reliance Group, is one of India's leading private sector financial services companies. It ranks amongst the top private sector financial services and banking groups, in terms of net worth. Reliance Capital has interests in asset management and mutual funds; life and general insurance; commercial and home finance; stock broking; wealth management services; distribution of financial products; asset reconstruction; proprietary investments and other activities in financial services.
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