Failed 2G auction brings cheers to telecos' shareholders

Failed 2G auction brings cheers to telecos' shareholders
Bharti Airtel: Quotes, News
BSE 319.30BSE Quote8.25 (2.58%)
NSE 319.30NSE Quote7.5 (2.35%)
Idea Cellular: Quotes, News
BSE 78.75BSE Quote3.35 (4.25%)
NSE 78.75NSE Quote3.45 (4.38%)
Shares of the top four telecom companies rising over 7.5 per cent in just four trading sessions since November 12 when 2G auctions started, as compared to 2 per cent decline in benchmark index Sensex, indicates that telecom shareholders have gained impressive returns even as the government failed.

Experts said that 2G auctions, which garnered Rs 9,407 crore for the government as against the target of Rs 40,000 crore, were the indicators that operators learnt their lessons from the 3G auction and didn't bid aggressively for spectrum this time. The bid amounts indicated that they may not have to shell out anything in the next three years.

Some shareholders also felt that it cleared the fog of regulatory uncertainty from the sector, that was detering investment decisions by various participants.

Telecom stocks, which have been underperformer this year, have risen almost 7.6 per cent in the last four trading session, boosting the market capitalisation of the top companies in the sector-- Bharti Airtel, Idea Cellular, Reliance Communications (RCom) and Tata Tele (TTML)-- by Rs 11,286 crore, said a media report.

Bharti Airtel, the country's largest mobile services provider, added the most to its market cap by gaining 9.4 per cent during the past week. Rcom rose 7.2 per cent, adding Rs 750 crore to its market cap, followed by Idea gaining 2 per cent and TTML gaining 1.7 per cent since Monday, said report.

Read more about: bharti airtel, idea
Story first published: Monday, November 19, 2012, 10:30 [IST]
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