SC verdict revives Rcom; up 9 per cent

The stock of Reliance Telecommunication (Rcom) spiked up in the early morning session on Monday, reacting to the Supreme Court order that allows the company to go ahead with the spectrum sale after ensuring a corporate guarantee from Reliance Realty.

The Supreme Court directed the government to clear Rcom's spectrum sale with a caveat that the company should deposit Rs. 1,400 crore corporate guarantee through its subsidiary Reliance Realty, on Friday. The government will have to issue NOC within a week after it receives the guarantee. Earlier, the Department of Telecommunications (DoT) had challenged the company's spectrum sale to Reliance Jio.

This order will make way for Rs. 250 billion deal between Reliance Telecommunication and Reliance Jio signed in December 2017 for its spectrum and other mortgaged assets. As a result, Rcom will have the funds to repay the due of lenders and its vendor Ericsson.

Meanwhile, Rcom has maintained that it cannot give bank guarantee citing the fact that it's going through insolvency proceedings. However, the company stated that it will pay Ericsson Rs. 550 crore by December 15 and furnish the corporate guarantee of Rs. 1,400 crore in 2 days.

The stock hit a high of Rs. 15.93 per share. The stock's upper circuit limit was revised from 10 to 15 per cent and is now at Rs. 16:41 for Monday's trading session. At 10:28 hours, the stock was trading at Rs. 15.57 per share, up by 9.11 per cent on BSE, when the benchmark index BSE Sensex was at 36,363.21, up by 168.91 points or 0.47 per cent.