RCOM Share Price Tanks 4% after Downgraded Rating

Rcom share price fell over 4  per cent in Thursday's trade after rating agency Moody's downgraded the company's corporate family rating and senior secured bonds to B1 from Ba3, mirroring RCom's weak operating performance in H1 of FY2017.

Annalisa Di Chiara, Vice-President and Senior Credit Officer at Moody's said in a note that it was evidenced by the continued reduction in profitability through Q2 of the financial year 2017, primarily at its Indian operations, the largest contributor, and the consequential rise in leverage, as measured by adjusted debt (including deferred spectrum liabilities)/Ebitda, which now exceeds 7.0 times.

RCOM share price declined 3.57 per cent to hit a low of Rs 36.20 on NSE. The scrip has been the worst performer from the telecom pack, tanking 19 per cent in the past one month against the 2.33 per cent surge of Bharti Airtel share price and 0.85 per cent gains and 0.51 per cent gain in Idea share price.

Moody's said the ratings stays under review for further downgrade, given the two material transactions that the company has lately announced, of the de-merger of RCOM's wireless business and its amalgamation with Aircel and a non-binding agreement for the sale of 100 per cent of tower assets and related infrastructure to Brookfield Infrastructure Group.

The transactions will probably result in a structural reorganization across the group and a recalibration of the credit risk for bondholders, Moody's said.

At 1:50 PM, RCOM share price was trading at Rs. 36.25, down by 4 per cent as compared to 0.06 per cent decline in the Benchmark Index Nifty. The stock had opened at Rs. 37.50 against its previous day’s close of Rs. 37.75. So far, seventy eight lakh shares had changed hands over the NSE trading counter. RCOM is the top 500 performing stock recommended by Dynamic Levels for the quarter. For the details on the stock, visit RCOM share price history page of Dynamic Levels website.