Meanwhile, the BSE Sensex was up 232.09 points, or 1.39%, to 16,871.91.

On BSE, 7.81 lakh shares were traded in the counter as against an average daily volume of 4.32 lakh shares in the past one quarter.

The stock hit a high of Rs 96.10 and a low of Rs 88 so far during the day. The stock had hit a 52-week low of Rs 65.65 on Thursday, 26 July 2012. The stock had hit a 52-week high of Rs 166.90 on 19 September 2011.

The stock had underperformed the market over the past one month until 26 July 2012, falling 26.13% compared with the Sensex's 1.58% fall. The scrip had also underperformed the market in past one quarter, falling 7.75% as against 2.87% fall in the Sensex.

The small-cap company has an equity capital of Rs 29 crore. Face value per share is Rs 2.

Tulip Telecom announced after trading hours on Thursday, 26 July 2012, that its operations were in order and there was no new development that had any material impact on the company's operation and business. It added that no margin calls were triggered against the company's stock. The clarification came after the company's shares witnessed unusual price volatility on the bourses on Thursday, 26 July 2012. The stock slumped 25.98% to Rs 88.05 on that day.

Meanwhile, Fitch Ratings on Thursday, 26 July 2012, downgraded Tulip Telecom's National Long-Term rating to 'Fitch A-(ind)' from 'Fitch A+(ind)' and placed the rating on Rating Watch Negative.

Fitch Ratings said in a statement that the downgrade reflects its view that Tulip's financial leverage (adjusted net debt/EBITDAR) will remain at higher-than-expected levels in the short- to medium-term due to its subdued operating performance and higher-than-expected net debt in the 12 months ended March 2012.

Fitch added that financial leverage in the 12 months ended March 2012 significantly increased to 3.6x from 2.3x in the financial year ended March 2011, as gross debt increased above expectations to Rs 2750 crore from Rs 1780 crore due to high capital expenditure, large investments and increased working capital requirements. Revenue growth in Q4 March 2012 was subdued at 3.7%, compared with 19.3% growth in the preceding three quarters. EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) margin also declined sharply to 25.6% from 28.7% during the same period. Revenue growth is likely to remain subdued over the short- to medium-term in view of the weak economic environment and high competitive pressures.

According to Fitch statement, the Rating Watch Negative (RWN) reflects that Tulip has not yet tied up funds for redeeming its $97 million outstanding foreign currency convertible bonds (FCCBs), due in August 2012 at a premium of 44.506%. Fitch notes that the company has to rely on external funding sources, given its moderate operating cash flows, limited cash balance, insufficient undrawn facilities and high capex requirements. Fitch said it would resolve the RWN once the company ties up funding for redeeming FCCBs and details of the funding arrangement and its impact on credit profile of the company are available.

Fitch further said that the ratings continue to reflect Tulip's extensive network coverage within India. Its 9,000 kilometre (km) fibre network covers over 300 cities, and its wireless network provides last-mile connectivity in over 2,000 locations. The ratings also reflect Tulip's leadership position in the multi-protocol label switching virtual private network segment. Fitch said it expects the company's upcoming data centre facility to drive its revenue and profit growth in the medium-term. In May 2012, the company divested its 13% stake in Qualcomm joint venture for a cash consideration of Rs 221 crore, thus earning a profit on its Rs 140 crore investment made in the financial year ended March 2011.

The ratings are, however, constrained by the expected increase in competition in the corporate data connectivity (CDC) industry from existing telecom operators and roll-out of broadband wireless access services. Fitch noted that telecom operators facing a maturing voice market would most likely start focusing on the broadband market, including CDC. Tulip also faces regulatory challenges in the form of a possibility of imposition of license fees on its unlicensed 3.3 gigahertz spectrum and revenue sharing of its internet service provider business. The company may also need to raise more debt to fund its capital expenditure plans, Fitch concluded.

On a consolidated basis, Tulip Telecom's net profit fell 20.1% to Rs 66.04 crore on 3.7% increase in net sales to Rs 661.67 crore in Q4 March 2012 over Q4 March 2011.

Tulip Telecom is one of India's largest data telecom services and an IT solutions provider that innovatively provides customers with IP based infrastructural solutions. The company has over 3700 employees across India. With the largest data connectivity network spanning more than 2000 locations globally, Tulip has been the front-runner in provisioning multi-location networks for various industry verticals.