Reliance Communications drops after large acquisition buzz

Meanwhile the BSE Sensex was down 152.84 points or 0.85% on weak cues from
the global markets. US stocks dropped on Thursday, 14 February 2008, as the
credit crunch surfaced unexpectedly in the municipal bond market and after
the Federal Reserve Chairman Ben Bernanke said that he sees sluggish
economic growth ahead.

On BSE, 1.25 lakh shares of the scrip were traded. The stock had an average
daily volume of 17.57 lakh shares on BSE in past one quarter.

The scrip had touched a high of Rs 605 and a low of Rs 595 so far during the
day. The stock had hit a 52-week high of Rs 844 on 10 January 2008 and a
52-week low of Rs 371.25 on 16 March 2007.

The large-cap scrip had underperformed the market over the past one month
till 14 February 2008, declining 16.66% compared to the Sensex's decline of
10.58%. It also underperformed the market in the past one quarter, declining
13.85% compared to Sensex's fall of 9.81%.

India's second largest listed telecom firm by sales has an equity capital of
Rs 1032 crore. Face value per share is Rs 5.

At the current price of Rs 599.50, the scrip trades at a PE multiple of
70.86, based on Q3 December 2007 annualised EPS of Rs 8.46.

As per reports, Reliance Communications is interested in building a
significant IT business and acquisition of Capgemini would give it access to
a client base in continental Europe and catapult it among the world's top
ten IT groups by market share. The media reports said that both Reliance
Communications and Capgemini declined to comment.

Reliance Communications' net profit fell 43.4% to Rs 436.48 crore on
11.8%rise in sales to Rs
3403.52 crore in Q3 December 2007 over Q3 December 2006.

Reliance Communication provides telecommunication services. The company
provides wireless, wire line, voice, data and Internet communication
services.

Source: Capital Market