The lack of faith in these operators arose after the Department of Telecommunications (DoT) sought Supreme Court’s approval over spectrum dues which are worth Rs 33,000 crore.
Nothing is going good in telecom stocks today on Dalal Street. The investors have sold off shares in such heavy amounts that caused every telecom service provider especially Bharti Airtel, Tata Teleservices, Vodafone Idea and Reliance Communications to plunge in the range of 5% to massive 12%. The lack of faith in these operators arose after the Department of Telecommunications (DoT) sought Supreme Court’s approval over spectrum dues which are worth Rs 33,000 crore. S&P BSE Telecom index was trading at 1,079.49 below by 39.20 points or 3.50%.
The worst to react on the index was Anil Ambani’s Reliance Communications as the share price of this company tumbled by nearly 12% with intraday low of Rs 11.65 per piece. However, at around 1342 hours, the share price was trading at Rs 12.40 per piece below Rs 0.80 or 6.06%.
Going ahead, the newly formed merger Vodafone Idea Ltd plunged by over 6.28% with intraday low of Rs 42.50 per piece. However, it managed to recover some of the losses, and was currently trading at Rs 42.90 per piece down by Rs 2.45 or 5.40%.
Telecom giant Airtel was also in bloodbath, as it slipped by nearly 5% with intraday low of Rs 352.85 per piece. Currently, the company was trading at Rs 353.55 per piece down by Rs 18.85 or 5.06%.
Next in line was Tata Group’s telecom arm Tata Teleservices which trading at Rs 4.31 per piece lower by 5.07%. The company has plunged by 5.28% with intraday low of Rs 4.30 per piece on BSE.
Other stocks that were also in negative involved – HFCL at Rs 19.05 per piece down by 8.41%, MTNL at Rs 14.25 per piece below 5.94%, Vidhya Teleinks at Rs 1456.10 per piece down 5%, ITI at Rs 85.65 per piece down 3.44% and Tejas Network at Rs 267.30 per piece below 3.13%.
DoT’s plea before SC includes, spectrum worth Rs 33,000 crore from all operators toward license fee and spectrum usage charges.
The department has cited that existing bank guarantees from telcos are not sufficient enough to cover huge public money at stake.
Such comes as a negative factor for the above mentioned telcos especially the larger ones as it poses extra financial burden on them.
A decision favoring DoT, could add further financial liability on Rcom and may even delay the sale of its spectrum to Reliance Jio Infocomm. Other telcos, will also have to recalculate their liabilities in order to meet DoT demand. – Zee Business