Stock in Reliance Communications (RCom) jumped more than 6 per cent in early trade on Monday, a day after the company announced that its board of directors had approved the plan to de-merge its real estate business.
RCom said yesterday that it would spin off its real estate assets into a separately listed unit, which would be called Reliance Properties Ltd (RPL), in a bid to unlock value.
RCom President & CEO Gurdeep Singh said, "The deal is part of RCom's effort to get out of non-core business, reduce debt and concentrate on telecom business within the country."
The de-merger of the assets is expected to enhance value for the company's existing shareholders, who will get one RPL share for each RCom share they hold. RCom shares currently have a market price of around Rs 130 apiece. Valued in the range of Rs 10,000-12,000 crore, RPL is expected to get listed within the next three months.
The company also announced that RPL would work with global partners to develop real estate business, which includes lands in New Delhi and Mumbai. When developed, the real estate would value more than Rs 120 billion.
After hitting a session high of Rs 142.20 apiece, RCom shares were trading at more than 6.2 per cent at 9:28 a. m. on Monday.
Source: Top News