ADAG stocks gain; RCOM surges 59%

India Infoline News Service | Mumbai | May 17, 2018 15:24 IST

RCOM and Ericsson AB are in talks to settle the outstanding debt directly than through the insolvency process.

ADAG stocks rallied in today’s trade on news that RCOM and Ericsson AB are in talks to settle the outstanding debt directly than through the insolvency process.

Yesterday, the NCLT had initiated insolvency proceedings against RCOM after accepting a petition from Ericsson AB regarding unpaid dues amounting to Rs1,160cr. The settlement of dues by RCOM would make sense considering that the insolvency process would result in change in ownership of the company.

This news provides some hope that RCOM would be able to avoid insolvency proceedings. Further, insolvency proceedings would also put a hold on any asset sales. This would have stopped RCOM’s asset sale to Reliance Jio. However, it remains to be seen whether the NCLT would accept this new arrangement and would roll back the insolvency proceedings. We still recommend that investors use this opportunity to exit the stock, as there is still a lot of uncertainty surrounding the future of RCOM.

Reliance Communications Ltd is currently trading at Rs17.05 up by Rs6.5 or 61.61% from its previous closing of Rs10.55 on the BSE.

Reliance Power Ltd is currently trading at Rs35.75 up by Rs2.4 or 7.2% from its previous closing of Rs33.35 on the BSE.

Reliance Infrastructure Ltd is currently trading at Rs396 up by Rs11.6 or 3.02% from its previous closing of Rs384.40 on the BSE.

Reliance Capital Ltd is currently trading at Rs393.50 up by Rs18.65 or 4.98% from its previous closing of Rs374.85 on the BSE.


***Note: This is a NSE Chart

 

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