[T.S.R:16892] Unitech Limited: Did They Dial The Wrong Number?

 

Unitech Limited: Under The Scanner

In light of the recent events related to the 2G spectrum issue, Unitech stock rating has been put under Review till further clarity emerges. Unitech owns 32.75% in Uninor with an investment of  Rs 6.8bn.

n       Real estate business. Unitech has sold 20.7m sqft of space in the past six quarters, as of 2QFY11. Value of this sale stands at `93.7bn. Net debt for the company stands at `58bn, as of 2QFY11.

n       2G spectrum issue. The promoters had applied for and acquired UAS licenses for 22 circles, for `16.58bn. Post the licenses, they sold 60% share to Norway-based Telenor for a consideration of `61bn; the new company is called Uninor. Unitech owns 32.75% stake in Uninor with an investment of ~`6.8bn.

n       Impact on Unitech. Recent events related to 2G spectrum could directly impact Unitech as it holds a 32.75% stake in Uninor. Unitech's real estate business could face liquidity crunch for acquisition of future projects.

If things go bad for Unitech, then it could hit both the Real Estate and Telecom businesses, more so politically. Worse even at Rs 35, the Unitech market cap is a massive Rs 10,000 down ofcourse a colossal Rs 1 lakh crore in the last 3 years.

 

 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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