Bharti Airtel share hits record level, RCom and Voda Idea leap; Telecom stocks win ahead of Cabinet meeting

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The Union cabinet is due to meet later today to consider a moratorium on the payment of spectrum fees by telecommunications companies. Image: Reuters

Bharti Airtel’s share price hit a new all-time high, while other telecoms stocks jumped ahead of the Union Cabinet meeting scheduled for later today to consider financial relief for struggling companies. Bharti Airtel share price hit a record high of Rs 719.60, rising more than 3% against BSE. MTNL stock gained nearly 2% while Reliance Communications rose 1.6%. Vodafone Idea stock also rose 0.58% to Rs 8.74 each. The Union cabinet is due to meet later today to consider a moratorium on the payment of spectrum fees by telecommunications companies.

Vodafone Idea has to pay 58,000 crore rupees in Adjusted Gross Income (AGR) contributions. The Ministry of Telecommunications (DoT) has proposed that payment be deferred for a period of four years. Legal observers have said that if the government decides to postpone this payment for four years, it must go to the Supreme Court. Officials have so far said the issue has not been discussed with the Justice Department.

Also read: Government will only offer cash relief to telecom operators

Analysts say the telecommunications industry is now more or less a duopoly-type scenario. “In Bharti Airtel stock, we can see continued buy support close to the Rs 670-690 levels. When it comes to the Vodafone Idea share, the fundamentals are unclear, ”Vishal Wagh, research manager, Bonanza Portfolio, told The Bharat Express News Online. In the morning offers, Bharti Airtel was the top winner of the ESB Sensex. Over the past month, Bharti Airtel has rebounded 13.19%, compared to an increase of 5.26% for the S&P BSE Sensex.

The telecommunications industry has been on the radar of investors and traders over the past week as the central government has had numerous meetings with the Ministry of Telecommunications to assist indebted telecommunications companies which are essential to the country’s development. . The government is considering various options to financially support telecommunications companies, including a relief plan that could include a one-year moratorium on spectrum payments due in April 2022, as well as the monetization of telecommunications assets through InvIT and FPI instruments, and providing comfort letters to telecommunications service providers, an analyst said.

“Apart from that, the cabinet could make two important decisions in the telecommunications sector that could change the fate of the industry. First of all, the Council of Ministers should propose to lower the telecom fee from 8% to 6%. Second, the Cabinet can change the definition of Average Gross Income (AGR) that the industry has long demanded, which allows it to avoid paying higher interest rates, ”said Likhita Chepa, Senior Research Analyst. , CapitalVia Global Research, at The Bharat Express News Online.

Chepa added that investors were bullish on this, given the recent rally in telecoms stocks. If any of the above are recommended by the cabinet, telecoms stocks could continue to rise for another week. In the S&P BSE Telecom package, with the exception of Tata Communications and Sterlite Technologies, all stocks were trading within a range of 0.3 to 5%. Vodafone Idea stock also rose 0.58% to Rs 8.74 each.

(The stock recommendations in this story are by the respective research analysts and brokerage firms. The Bharat Express News Online assumes no responsibility for their investment advice. Investments in the capital markets are subject to rules and regulations Please consult your investment advisor before investing.)

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