Bharti Airtel at record high; Vodafone Idea gains 7% ahead of Cabinet meet

Shares of telecom services provider caught investor fancy on Wednesday with Bharti Airtel hitting a new high at Rs 684, up 2 per cent, while Vodafone Idea jumped 7 per cent to Rs 8.90 on the BSE in the intra-day trade, ahead of the Cabinet meet scheduled later in the day. According to reports, the government may discuss a relief package for stressed sector.

Specifically, the Union Cabinet may discuss a bailout package for the telecom sector today, which could include cut in levies that the industry pays, apart from a lenient definition of income (adjusted gross revenue, or AGR) which could reduce the total burden on the sector.

"As part of the package, there could be some relaxation on payment of levies to the government including a one-year moratorium on spectrum installment due in April 2022," a Business Standard report said.

Further, the Centre has held several rounds of discussions on encouraging telecom companies to monetize their assets via InvIT and REIT instruments, an official at the Department of Telecommunications (DoT) said. The idea is to back telcos with sovereign assurance while they get to tap international investors. It could not be confirmed if such a proposal would come up before the Cabinet, the report added. CLICK HERE FOR FULL REPORT

Among individual stocks, Vodafone Idea has now rallied 49 per cent in the past seven trading sessions, including today's 7 per cent gain, on hopes that the government will provide the necessary support to address all structural issues faced by the sector.

"As the industry continues to remain under unsustainable financial duress, the company is hopeful that the government will provide the necessary support to address all structural issues faced by the sector. Therefore, while the company awaits the final government’s decision, it will continue to remain focused on providing quality service to the customers and sustain intensity in the market," Vodafone Idea stated in its annual report.