Shares of Mukesh Ambani-owned entities, Hathway Cable and TV 18 Broadcast, rallied up to 20 per cent in early deals on Tuesday after Reliance Industries (RIL) announced to consolidate its media and distribution business.
RIL on Monday said it would restructure its media and distribution business by merging three group entities - Television 18 Broadcast, Hathway Cable and Datacom and Den Networks - into Network18 Media and Investments.
Under the scheme of arrangement, the broadcasting business will be housed in Network18 and the cable and ISP businesses in two separate wholly-owned subsidiaries of Network18. Post restructuring, RIL's shareholding in Network18 will come down to around 64 per cent from existing 75 per cent.
Boosted by the development, shares of Hathway Cable & Datacom hit an upper circuit limit of 20 per cent at Rs 23.10 apiece on the Bombay Stock Exchange. The stock has opened higher at Rs 22.80 against previous closing price of Rs 19.25. In a similar trend, the stock was trading 20 per cent higher at Rs 23.10 on the National Stock Exchange (NSE). In contrast, the BSE Sensex was trading 331 points, or 0.81 per cent, lower at 40,724.
There was also spurt in volume trade as 2.43 lakh shares changed hands over the counter as compared to two-week average volume of 0.28 lakh shares.
Among others, shares of TV 18 Broadcast surged 19.68 per cent to hit an intraday high of Rs 30.10 against previous closing price of Rs 25.15.
While shares of DEN Networks climbed 10 per cent to hit a high of Rs 59.5, Network18 Media & Investments spurted 4.89 per cent to Rs 30.05.
Bucking the trend, shares of Reliance Industries were trading 0.82 per cent lower at Rs 1,466.25 apiece on the BSE. The stock has opened marginally higher at Rs 1479 against previous closing level of Rs 1478.40.
By consolidating businesses, Reliance Industries intends to create a media entity with interests in news, entertainment, internet, ISP and cable businesses which can compete with rivals such as Zee Group, Sun TV Network among others.
By Chitranjan Kumar