The deleveraging exercise, if any, would only help Reliance Jio create more room to borrow and continue with its aggressive expansion plans
Reliance Jio Infocomm Ltd decided last week to hive off its fibre and tower assets and house them in two separate companies. Such a move is typically associated with a plan to sell a stake to a strategic or financial investor at a later stage. According to an analyst at an institutional brokerage, the 4-5% rally in the shares of Vodafone Idea Ltd and Bharti Airtel Ltd late last week was partly linked to this news. After all, if Reliance Jio sees the need to raise funds by selling minority stakes in its fibre and tower assets, an end to its relentless “raise debt, burn cash" strategy may finally be in sight. At least, that’s how some investors see it.
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