Mumbai, March 6: Anil Ambani has raised the prospect of a possible stake selloff in Reliance Communications Ventures Ltd (RCoVL) on the very day it listed on the bourses by saying that he would seek shareholders’ vote through a postal ballot on a resolution to raise the FII limit in the company to 74 per cent.
“We intend to go all the way to 74 per cent ' a level that is allowed by the telecom policy,” Ambani told reporters here this evening after a blockbuster listing of RCoVL that ratcheted up his group’s market capitalisation to almost Rs 86,000 crore (nearly $20 billion). It put him third in the pecking order after brother Mukesh’s companies and the Tata group.
The foreign investment in RCoVL at present is around 23 per cent ' all of it held by foreign institutional investors (FIIs). Another 7 per cent is held by a New York depository in the form of shares that underlie global depository receipts (GDRs) issued earlier, Ambani said.
It’s just an enabling resolution at this stage: and there’s no guarantee that Ambani will sell a part of his stake.
“Obviously, if it (the foreign holding) goes up to 74 per cent, somebody has got to sell,” he said without elaboration.
Ambani and his associates hold 40.54 per cent in RCoVL at present while the Indian public holds just a little over 16 per cent. So, there’s really no way that the FII limit can touch 74 per cent unless he offloads a part of his stake.
Ambani admitted that he had been approached by several overseas telecom players, including South Korea Telecom, for a piece of the Reliance Communications pie. “We have had some discussions; but that is all there is to it,” he added. He said the CEO of South Korea Telecom was a buddy from Wharton.
“We will examine (these proposals) at an opportune time,” he said.
But before all this can happen, Ambani signalled he would consolidate all the telecom undertakings within the group. “I am committed to a simpler, clearer holding structure. We will move on that expeditiously.”
He said over Rs 5,500 crore a year would be invested in the communications business over the next three years.
Earlier this morning, Anil Ambani sounded the gong at the Bombay Stock Exchange and heralded the listing of RCoVL ' the last of the four demerged companies that are now under his control.
Asked later in the evening whether he had spoken with brother Mukesh after the listing of all four companies, he said tersely, “I haven’t had the pleasure of speaking with him yet.”
RCoVL began trading with a bang when it opened at Rs 290, yielding a market capitalisation of Rs 35,470 crore at this price.
Although the market value is way below the Rs 71,000 crore valuation of Bharti Tele-Ventures Ltd (BTVL), the highest valued telecom company on the stock exchanges, RCoVL’s opening was not at a sharp discount to the share price of BTVL, which few observers were predicting. Most of the analysts were projecting RCoVL to list within a band of Rs 260 to Rs 300 per share.
Ambani later claimed that the share did not reflect the full value of all the telecom businesses since RCoVL only held a 45 per cent stake in Reliance Infocomm (RIC), the jewel in its crown.
Once the mergers take place, the market valuation would rise.
“On a 100 per cent ownership basis, RCoVL’s market capitalisation would be Rs 54,750 crore,” he added.
Ambani claimed that the total traded volume in RCoVL shares today amounted to Rs 2,200 crore, which was about 17 per cent of the market’s total traded volume.
Within a few minutes of listing, over 1 crore shares were traded on both the bourses. On the BSE, the scrip shot to an intra-day high of Rs 309.
Though it hit an intra-day low of Rs 277.15, the stock closed at Rs 290.85, implying a market capitalisation of Rs 35,575 crore. The huge investor interest in RCoVL shares could be gleaned from the fact that it topped the turnover charts.
On the BSE itself, more than 2.17 crore shares were transacted, resulting in a turnover of Rs 627.71 crore.