Free Press Journal

Incumbents make merry as new telcos melt at D- St



Shares of new telecom licensee companies were beaten down heavily in the stock market after the Supreme Court cancelled as many as 122 2G licences granted by former telecom minister A Raja, but old players

like Bharti Airtel and Idea Cellular saw smart gains.

Bharti Airtel and Idea Cellular outperformed the broad- based selling pressure witnessed in the some of the telecom- related stocks. Shares of Bharti surged 6.88 % to close at Rs 385.95, becoming the best performer among the 30- Sensex blue chips. In a similar fashion, Idea, too, went up by 2.68 %. Shares of Reliance Communications which had lost 9.31 % during the day, pared most of the losses and settled at Rs 96.85, down 3.54 %. Some sort of recovery was seen during the later part of the day in the earlier- battered stocks as well, as some investors saw buying opportunity at lower levels.

The BSEs sensitive index, comprising a basket of 30 stocks, closed in the green at 17,470.7 points, with a gain of 170.12 points, or 0.98 percent.

Shares of realty firm Unitech, one of the promoters of Uninor, was the worst hit and settled the day 7.04 % down at Rs 25.10 on the BSE, after dropping as much as 14 %. DB Realty, which had lost 8.62 % during the day, trimmed most of the losses and closed the day 0.48 % lower at Rs 62.30.

Videocon ended at Rs 171.95, down 0.92 %. Banks with large exposure to telecos whose licenses were cancelled also ended lower. IDFC lost 4.7%, which has the largest exposure to the sector as a percentage of its total loan book. State Bank of India was down 0.2%. 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.