Mumbai: After today’s Supreme Court verdict, shares of some telecom-related firms fell sharply by up to 14 percent. However, older telecom players like Bharti Airtel and Idea Cellular bucked the trend with smart gains. The Supreme Court cancelled 122 2G licences granted by former telecom minister A Raja.
Shares of realty firm Unitech, one of the promoters of Uninor, plummeted the most by 14 percent to Rs 23.20 on the BSE. Besides, DB Realty tanked 8.62 percent, while Videocon declined 4.29 percent.
A number of banking stocks, including a nearly five percent fall in SBI stock, on concerns over their huge exposure to the affected telecom companies.
Uninor stocks plummeted 14 percent to Rs 23.20 on the BSE.
In contrast, Bharti Airtel surged over 8 percent, Idea Cellular jumped 6.85 percent and Tata Teleservices Maharashtra moved up 1.53 percent.
Shares of Reliance Communications also lost 9.31 percent to close at Rs 91.05, even as the company’s name was not among the cancelled licences.
RCom said that licences to the company were issued in 2001 or prior to that and will not be affected by the Supreme Court judgement pronounced squashing all 122 licences alloted in January 2008.
“RCom’s licences are not affected by the Supreme Court judgement pronounced today,” it said in a statement.”The Supreme Court judgement is a big blow to all the telecom companies whose licences are cancelled. Bharti isa clear winner here as it was not entangled in all these issues. Major licence holders are affected and will suffer in the near term,” Ashika Stock Brokers Research Head Paras Bothra said.
Later, however, some sort of recovery was seen in telecom stocks, with RCom trading 3.14 percent down and Unitech was quoting 5.37 percent lower.
DB Realty recouped all its initial losses and was trading 2.96 per cent higher, while Videocon was still quoting 0.89
percent lower.
The 122 licences were given by Raja for over Rs 9,000 crore, while 3G auctions for a smaller number of licences had fetched the government a sum of Rs 69,000 crore.
The companies that are set to lose on account of the cancellation of the licences are Uninor (joint venture between Unitech and Telenor of Norway), Loop Telecom, Sistema Shyam (joint venture between Shyam and Sistema of Russia), Etisalat DB (joint venture between Swan and Etisalat of UAE), S Tel,Videocon, Tatas and Idea.
Among the 122 licences issued by Raja in January 2008 on first-come first-serve basis, Uninor was alloted 22 pan India licences, Loop 21, Sistema-Shyam 21, Etisalat-DB 15, S Tel 6, Videocon 21, Ideanine and Tatas three.
PTI
