New Delhi: Telecom stocks were hit by severe selling pressure today, falling sharply by up to 11 per cent in intra-day trade, which wiped out Rs 16,997 crore from their market valuation after RIL chief Mukesh Ambani read out aggressive plans for Reliance Jio network.
Reliance Industries, however, was not lucky enough as during the day, shares fell by 3 per cent to Rs 1,026.25, knocking Rs 10,295 crore off its m-cap. It ended 2.73 per cent lower at Rs 1,029.15.
Investors deserted the counters of telecom operators, with Idea Cellular plunging 11 per cent to Rs 83.20 -- its 52-week low -- during the day on BSE. Later, the stock closed at Rs 83.70, down 10.48 per cent.
Shares of Bharti Airtel tanked 8.99 per cent to Rs 302 intra-day and ended the day 6.37 per cent lower at Rs 310.70.
Reliance Communications too slumped 10.11 per cent to Rs 48.45 during the session and later ended with a loss of 8.81 per cent at Rs 49.15.
Shares of Tata Teleservices (Maharashtra) Ltd dived 2.83 per cent to Rs 6.19.
After the intra-day plunge, Bharti Airtel lost Rs 11,932 crore in market valuation while Idea saw an erosion of Rs 3,709 crore and RCom Rs 1,356 crore.
"Whenever any late entrant in any industry adopts penetration pricing to capture the market share, it does destabilise the existing players. The glimpses of the same were visible today in the form of bloodbath in the stock prices of Idea and Bharti Airtel, which were down," said Jimeet Modi, CEO, Samco Securities.
Following the sharp losses in these stocks, the BSE telecom index too plunged 5.67 per cent to end at 1,156.58.
"No doubt, tariff plans for voice and data are going to be a game changer for the telecom industry... Though, top line from telecom business will start trickling in, big concern arises on timelines of achieving operating break-even point in the context of tariff policy deployed," said Dharmesh Kant, Head – Retail Research, Motilal Oswal Securities.
Storming his way into the telecom industry, India's richest man Mukesh Ambani today announced free voice calls and free national roaming along with rock-bottom data prices on his new Reliance Jio network that will debut on September 5.
Devoting two-thirds of his 90-minute speech at Reliance Industries' shareholder meet to a slew of announcements on Jio, he took competition head-on by announcing free services on Jio for four months beginning September 5.
Voice calling will be free on Jio phones for life and post December 31, 10 data plans will be offered starting at Rs 19 a day for occasional users, Rs 149 a month for low data users and Rs 4,999 a month for heavy data users.