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Financial

Shyam Soars on Relisting

On a day when the Bombay Stock Exchange hit a record high, Shyam Telecom Ltd. , a New Delhi, India-based wireless equipment maker, relisted on the market and quickly saw its share price rocket up 144 percent to 147.8 Rupees (US$3.29).

One of India's few telecom equipment vendors, Shyam makes gear for GSM, CDMA, iDEN, UMTS, and TETRA networks, focusing on in-building coverage systems. While business is booming for India's mobile operators, its equipment market is developing more slowly.

Shyam suspended trading of its shares on July 25 while it restructured as a holding company, creating a subsidiary unit for its manufacturing business.

The stock was valued at around Rs. 60 ($1.33) before it was delisted, and the boost reflects the high demand for telecom stocks. According to Lehman Brothers , carriers Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and Reliance Communications Ltd. (RCom) have seen their stocks rise by 30 percent and 40 percent, respectively, over the last three months -- outperforming the exchange, which was up by more than 23 percent in the same period.

Shyam's share price closed the day at Rs. 137.4 and was the top gainer on the market.

The company has cut its equity capital by two-thirds -- from Rs. 322 million ($7.16 million) to Rs. 112.7 million ($2.51 million) -- and for every 100 shares in Shyam Telecom it's issuing 35 shares plus 794 shares in Sistema Shyam TeleServices Ltd. , which was spun out in the restructuring and is set to go public in December.

Shyam Telelink is a CDMA-based mobile operator in Rajasthan, India's largest state, with 240,000 subscribers -- making it a small fish in a market with more than 131 million subscribers. Shyam is still courting potential investors with a view to selling a stake in the company after talks to sell the carrier to South Korea's KT Corp. fell through in April.

— Nicole Willing, Reporter, Light Reading

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