Telecom stocks drop on profit-booking

Telecom shares declined on Thursday due to profit-booking by investors despite the government doling out a Rs 42,000 crore relief to debt-laden telecom companies.

Vodafone Idea plunged 6.08 per cent to close at Rs 6.64 on the BSE, ended its four-day winning streak. Intra-day, the stock tanked 12.16 per cent to Rs 6.21.

The stock price had more than doubled in the four sessions to Wednesday.

Bharti Airtel dropped 2.52 per cent to close at Rs 426.25. During the day, it fell 3.38 per cent to Rs 422.45. Airtel had lost 0.46 per cent on Wednesday.

Paras Bothra, President of Equity Research, Ashika Stock Broking, said profit booking was witnessed in telecom stocks even after Union Cabinet's approval of two years moratorium on spectrum payment dues.

The government on Wednesday doled out a Rs 42,000 crore relief to debt-laden telecom companies after it agreed not to take any payments for spectrum they use for the next two years.

Despite the relief, the government was unlikely to intervene in the Supreme Court-mandated statutory payments of around Rs 1.4 lakh crore, sources had told PTI.

On October 24, the Supreme Court ordered telcos to pay as much as Rs 1.4 lakh crore in past statutory dues after considering non-telecom revenues for their calculation.

The Union Cabinet approved giving Bharti Airtel, Vodafone Idea Ltd and Reliance Jio an option to avail of a two-year moratorium on payments they were supposed to make in yearly installments for the spectrum bought in auctions, Finance Minister Nirmala Sitharaman said on Wednesday.

These stocks were gaining after Bharti Airtel and Vodafone Idea on Monday announced a rise in mobile phone call and data charges from December saying the increase was warranted for viability of their business.