Shares of some telecom-related firms fell sharply by up to 14 per cent today after the Supreme Court cancelled as many as 122 2G licences granted by former telecom minister A Raja,but older telecom players like Bharti Airtel and Idea Cellular bucked the trend with smart gains.
Shares of realty firm Unitech,one of the promoters of Uninor,plummeted the most by 14 per cent to Rs 23.20 on the BSE.
Besides,DB Realty tanked by 8.62 per cent,while Videocon declined by 4.29 per cent.
Shares were down for a number of banks as well,including nearly five per cent fall in SBI stock,on concerns about their huge exposure to the affected telecom companies.
In contrast,Bharti Airtel surged by over 8 per cent,Idea Cellular jumped 6.85 per cent and Tata Teleservices Maharashtra moved up by 1.53 per cent.
Shares of Reliance Communications also lost 9.31 per cent to Rs 91.05,even as the company’s name was not among the cancelled licenses.
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 is 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 in the day,some sort of recovery was seen in telecom stocks,with RCom trading 3.14 per cent down and Unitech was quoting 5.37 per cent lower.
DB Realty recouped all its initial losses and was trading 2.96 per cent higher,while Videocon was still quoting 0.89 per cent 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,Idea 9 and Tatas 3.