Mumbai: The Supreme Court (SC) on Friday rejected the review petition filed by the telecom companies VodaIdea, Airtel and Tata Teleservies seeking more time for payment of Adjusted Gross Revenue (AGR) dues and directed them to pay the Department of Telecom its dues by March 17, 2020.
The apex’s court’s verdict will have grave revenue implications on the already ailing telecom operators that are facing tough competition after the entry of Reliance Jio into the market.
Shares of Vodafone Idea reversed their early morning gains and dipped 11 per cent to Rs 3.96 on the BSE yesterday. However, shares of Bharati Airtel jumped at a five per cent to a fresh lifetime high of Rs 565 on Sensex on Friday as investors bet on a potential duopoly in the Indian telecom market after the Supreme Court rejected the telecom giants’ plea regarding AGR payments.
The stock of the telecom services provider bounced back six per cent from its intra-day low of Rs 535 on the BSE. It surpassed its previous high of Rs 552.85, touched February 6, 2020.
On Thursday, Vodafone Idea reported a loss of Rs 6,400 crore for the December. The company is also facing difficulty in raising capital due to credit rating downgrade.
Banking stocks with exposure to these telecom operators declined as the AGR verdict poses threat of mounting non-performing assets. Nifty bank index slipped 1.5 percent to a low of 30,776.10.
Shares of IndusInd and IDFC Bank hit new 52-week lows of Rs 1,777.60 and Rs 39.75, respectively. RBL Bank was down by nearly 3 percent, Axis Bank 2 percent, HDFC Bank 2 percent, Federal Bank 1.6 percent, and SBI 2.5 percent.
YES Bank, which has the highest exposure to telecom sector was, however, trading higher on fund raising plans. ICICI Bank was fluctuating between losses and gains.