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Be aware of these important things of RCOM share before investing in it!
Many Investors are mistakenly assuming that Reliance Communications Ltd will soon be bought by Mukesh Ambani, the company is going to benefit a lot from 5G and considering its cheap share price, therefore they should purchase the shares. Dear friends, that is not true and it is just half the information.
Mukesh Ambani was interested to buy Rcom but in the early months of 2018. Since the AGR matter came out, Mukesh Bhai has stepped out from purchasing Rcom company. When Mukesh Bhai did this and in absence of hope of improvement in Telecom Sector health, Anil Ambani decided to send Rcom for Bankruptcy.
Here, it is important to note that Banks didn’t drag Rcom to Bankruptcy court. Instead, Anil Ambani dumped the company itself and let it go for bankruptcy. Why he did this? He did so because Mukesh Bhai denied buying Rcom after the AGR matter came out. After this, Rcom had turned into just a mess. Nothing was left for the Equity Shareholders of Rcom. Thereafter, since the bankruptcy proceedings started against Rcom, Mukesh Ambani has shown interest to buy Infratel Business of Reliance Communication (Rcom) and not the whole company.
Before the Bankruptcy proceedings too, Mukesh Bhai was interested to Buy Rcom just because it could benefit Jio. However, after AGR Matter, Mukesh Bhai dropped this plan because who will take the tension of AGR dues? As of now, there is nothing like Mukesh Ambani is interested to buy the whole Rcom. He is interested to buy just Infratel Business (subsidiary) of Rcom which could still benefit him. Jio uses Telecom towers (Infratel Assets) of Rcom to provide their services. Therefore, if someone else bought them and he lost them, he will incur high expenses. If Mukesh Ambani purchases Infratel Business, Jio would be able to continue using its towers.
However, purchasing the Infratel business wouldn’t benefit the Equity shareholders of Rcom. It depends on who is buying the Rcom and not it’s subsidiary! Spectrums of Rcom (which is among the biggest assets of the company and the only hope for Lenders to recover some money is on the verge of cancellation due to AGR non-payments). Even lenders are finding it difficult to recover money from Rcom. Then how Equity shareholders can get anything easily?
If some positive outcome comes through Courts regarding AGR dues of Bankrupt Telecom Companies, only then there would be some hope. Otherwise, there is a lot of mess in Rcom. As of now, there is nothing like Mukesh Ambani is going to purchase the whole Rcom Company. Secondly, 5G is not going to benefit Rcom as it is still fighting from Liquidation and trying to find a resolution plan. Liquidation will directly prompt the exchanges to delist shares. No one will be able to do anything. In recent weeks, there has been a spurt in trading volumes of Rcom shares.
A huge quantity of shares is getting traded every day. Regarding this, remember that we look at the trading volumes of those companies which are not under Bankruptcy proceedings. For companies under bankruptcy proceedings, ultimate and last share price drivers would be the proper resolution of the company and intention of new buyers whether they are interested to pay anything to existing shareholders or not. Remember these things and take any trade accordingly in Rcom shares. Don’t indulge in any Big trade of Rcom shares just because there is a sharp jump in trading volumes! Investing.com
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