RIL on October 17 announced that it will buy majority stakes in Den Networks Ltd and Hathway Cable and Datacom Ltd for Rs 5,230 crore, a move aimed at becoming the largest player in the broadband as well as the cable TV and direct-to-home market.
The board also cleared a similar proposal pertaining to transfer of its tower infrastructure "on a going concern basis, to a separate company".
RIL, which has invested more than $30 billion over the past five years across energy, petrochemicals, retail, and telecom verticals, did not say where it will use the proceeds of the issue.
IDFC Securities also said the RIL deal is the best thing that could happen to Hathway and Den Networks.
Macquarie said the blending of Hathway and Den's cable operations with Jio’s plans will be key monitorable going forward
132 stocks have hit new 52-week low including Amtek Auto, DEN Networks, Dena Bank, Hathway Cable, HDIL, INOX Wind, Kwality, Reliance Naval, Tata Power, Capital First and Vedanta among others.
Analysts feel the new fiber broadband service by Reliance is likely to impact cable TV service providers' customer base.
Edelweiss recommended hold rating on Den Networks with a target price of Rs 111 in its research report dated May 22, 2018.
Net Sales are expected to increase by 6.1 percent Y-o-Y (up 2.6 percent Q-o-Q) to Rs. 336.6 crore, according to Edelweiss.
The company, which has already started its first phase of expansion in 15 cities, is looking to roll out its services in over 500 cities in the coming 2-3 years, Den Networks said in a regulatory filing.
DEN Broadband, the internet service provider, announced expansion of a hi-speed internet services to 100 cities across India.
The market breadth was in favour of the declines with 843 stocks advancing while 901 declined and 292 remained unchanged. On the other hand, in the BSE, 1210 stocks advanced and 1539 declined and 152 remained unchanged.
The market breadth was in favour of the advances on Tuesday morning with 1047 stocks advancing as against 541 declines while 419 remained unchanged. On the other hand, 1292 stocks advanced and 701 stocks declined while 78 remained unchanged on the BSE.
For the company, uncertainties and risk factors outweigh the positives substantially, at least in the near-term.
The company had posted a net loss of Rs 38.75 crore during the same period of the previous fiscal, Den Networks said in a regulatory filing.