Multibagger to Multibegger: RCom’s 99.8% Crash Wipes Out Investor Wealth

•⁠  ⁠Once a telecom titan, Reliance Communications (RCom) has seen its stock plummet 99.8% from its peak.

 

•⁠  ⁠An investment of ₹1 lakh in 2006 would be worth just ₹210 today.

 

•⁠  ⁠RCom’s meteoric rise was driven by aggressive pricing, CDMA/GSM expansion, and infrastructure investments.

 

•⁠  ⁠The downfall began post-2008 due to mounting debt (₹49,000 crore by 2017), intense competition, and the disruptive entry of Reliance Jio.

 

•⁠  ⁠By FY20, revenue had collapsed to ₹1,685 crore (from ₹25,594 crore in FY16), with a staggering net loss of ₹42,677 crore.

 

Outlook: RCom’s story is a cautionary tale of over-leverage, market disruption, and strategic missteps. While the stock is now virtually worthless, it serves as a stark reminder for investors to monitor debt levels, industry dynamics, and management execution. Analysts advise steering clear of such legacy penny stocks and focusing on fundamentally sound businesses with sustainable growth.

 

Source: Trade Brains