Reliance Communications Ltd (R-Com) had struck when the iron was hot in mid-2014. It raised ₹ 4,800 crore through a qualified institutional placement (QIP) at a time when the risk appetite for Indian stocks had risen considerably. But the large investors who bought shares in the issue are now sitting on a loss of almost 50%.

As far as the company goes, it may have got the funds, but from an investor relations’ perspective, the QIP issuance has turned out to be a regrettable chapter. During the time of the issue, it had seemed that R-Com would backup the fund-raising with sale of non-core assets. A report in The Economic Times had said in June 2014 that the company plans to sell its international business, Global Cloud Xchange, in the next three-four months, its direct-to-home television business in six months and its real estate holdings over a two-three year period.

But about eight months later, there is no visibility on any of this. Monetization of the company’s non-core assets continues to look like a distant dream.

Besides, as R-Com’s quarterly results statements have shown, there’s hardly anything in its operational performance to get excited about. In the December quarter, revenues and Ebitda (earnings before interest, taxes, depreciation and amortization) rose by 1.2% and 0.3%, respectively. In the nine months till December, Ebitda fell by 5.7%, while revenues were more or less flat. Meanwhile, competitors Bharti Airtel Ltd and Idea Cellular Ltd have been reporting strong growth in profit in the past few quarters.

In addition, R-Com faces the greatest risk from the impending entry of Reliance Jio Infocomm Ltd. Analysts say that one of R-Com’s thriving businesses is data cards (also known as dongles), which can immediately come under pressure from Reliance Jio’s data-centric offerings.

According to an analyst with a domestic institutional brokerage firm, in the forthcoming auctions, the company also faces the risk of not being able to get renewal spectrum to continue services in some key circles. The reason for this is that the spectrum on offer is limited, and larger companies such as Bharti Airtel, Idea Cellular and Vodafone India Ltd may well use their financial muscle to buy better quality 900 megahertz spectrum, even in circles where they aren’t compelled to bid.

R-Com, on the other hand, is laden with debt and doesn’t have the luxury of some of its competitors while bidding in the auctions. After the QIP issue, net debt has reduced from around ₹ 40,000 crore to ₹ 36,767 crore.

A silver lining is that the company is generating cash flow from its core operations. However, it has no option but to quickly monetize non-core assets and reduce debt. The longer it takes to do this, the more it will distance investors.

The writer doesn’t own shares in the above-mentioned companies.

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