Karvy Stock Broking Limited has maintained ‘Buy’ rating on Reliance Communications (RCom) stock with an intraday target of Rs 614.

According to Karvy, day traders can purchase the stock between Rs 586-588 with a strict stop loss of Rs 575. If the stock market remains on positive track, the next target for the day will be above Rs 615.

Shares of the company, on Friday (May 16), closed at Rs 601.85 on the Bombay Stock Exchange (BSE). The total volume of shares traded at the BSE was 2847319. Current EPS and P/E stood at 12.53 and 48.03 respectively. The share price also touched a high of Rs 607.40 and Rs 587.15 during the day. The share price has seen a 52-week high of Rs 844 and a low of Rs 466.65 on BSE.

The outlook for the stock is really very strong, and it is expected to rise on the back of huge volumes.

Reliance Infratel, the telecom infrastructure division of Reliance Communications, is diluting 5% stake to a clutch of American and European investors in a pre-IPO placement, a deal which values the company at around Rs 500 billion.

According to the sources, Reliance Infratel has signed up an agreement with a few American and European investors for the pre-IPO placement. The most recent deal values the company at around Rs 500 billion, whereas the previous 5% stake dilution, which Reliance Infratel had made, valued the company at around Rs 280 billion.

Previously, the company privately placed 5% stake to a group of institutional investors. Reliance Telecom Infrastructure sold the stake for approx Rs 14 billion to a few investors that includes George Soros, HSBC, Fortress Capital, New Silk, Galleon, DA Capital and GLG Capital.

Earlier this week, SEBI cleared the IPO of Anil Ambani group firm Reliance Infratel. Reliance Infratel would offer 10% equity to the public valued at Rs 50-60 billion. The issue proceeds are proposed to be utilised towards funding development of passive infrastructure and general corporate purposes.

Reliance Communications (RCom) has obtained a USD 750-million loan from China Development Bank in order to fund its nationwide GSM foray.

It is learnt that this is the single-largest loan extended to an Indian company by the China Development Bank. The company has already received all necessary approvals including that of RBI for the said amount, whose tenure is for 10 years and carries a coupon rate of Libor plus 80 basis points.

Other stocks from the same sector that looks good for short-term as well as long-term trading includes Idea Cellular, Bharti Airtel, Tata Teleservice, MTNL and Tata Comm.