Telecom stocks Vodafone Idea, MTNL, Indus Tower rally; Here’s why

Madhu Balaji Updated - November 26, 2024 at 03:28 PM.

Telecom stocks such as Vodafone Idea, Indus Towers and MTNL are in focus

Telecom - Image used for representation | Photo Credit: MUSTAFAH KK

Telecom stocks such as Vodafone Idea, Indus Towers and MTNL surged in early trade on Tuesday, following reports citing that the Union Cabinet approved waiver of bank guarantees for telecom operators on spectrum purchased before 2022.

Responding to reports on the waiver of bank guarantees, MTNL has said, “This is a decision of Govt of India. However, no such specific decision or information is available at this point of time.”

MTNL shares traded 3.49 per cent higher on the NSE at ₹48.90 as at 2.07 pm. Shares gained nearly 8.88 per cent to hit the day’s high at ₹51.45.

However, the move could be a relief for Vodafone Idea as its quantum of bank guarantees crossed over ₹24,000 crore. Its CEO Akshaya Moondra said in the recent earnings call that the bank guarantees will impact the company’s ability to seek debt facilities from the banks for investment in networks.

Vodafone Idea shares zoomed nearly 19 per cent from previous close to trade at ₹8.28 on the NSE.

Vodafone Idea has also clarified that the company, as yet, has not received any communication from Department of Telecommunications (DoT)/ Government of India about any decision taken.

The telecom operator mentioned in its stock exchange disclosure that it made detailed representations to the DoT, in its filing on October 8, 2024, for removal of the bank guarantee requirements for spectrum acquired before 2022 which is also an industry ask.

Tata Teleservices stock surged 8.86 per cent as at 10.26 am, trading at ₹75.20 on the BSE.

Indus Towers stock soared 5 per cent to hit day’s high at ₹355.85.

Bharti Airtel stock traded flat on the NSE at ₹1,574.85, and Jio Financial Services also traded flat at ₹322.50 as at 10.29 am.

Sector and industry performance

Telecom reported a sharp contraction in losses to ₹300 crore in second quarter FY25, Motilal Oswal’s India strategy report quoted. 

The latest data from the Telecom Regulatory Authority of India (TRAI) showed that private telecos Vodafone Idea and Bharti Airtel lost 1.55 million users and 1.43 million users in September 2024, respectively, compared to the previous month. Vi has 212.4 million wireless subscribers, and Bharati Airtel has 383.4 million subscribers.

Analysts attributed the decline in overall subscriber base to tariff hikes in July 2024. JM Financial analysts said that Vodafone Idea has to sharply hike its capex to boost 4G coverage and capacity to drive mobile broadband upgrades and arrest subscriber decline.

Published on November 26, 2024 05:17

This is a Premium article available exclusively to our subscribers.

Subscribe now to and get well-researched and unbiased insights on the Stock market, Economy, Commodities and more...

You have reached your free article limit.

Subscribe now to and get well-researched and unbiased insights on the Stock market, Economy, Commodities and more...

You have reached your free article limit.
Subscribe now to and get well-researched and unbiased insights on the Stock market, Economy, Commodities and more...

TheHindu Businessline operates by its editorial values to provide you quality journalism.

This is your last free article.