After SC order Vodafone Idea cracks 15%, Airtel jumps 5%
Shares of Vodafone Idea NSE -16.67 % crashed but those of Bharti Airtel NSE 5.94 % gained after the Supreme Court on Tuesday ordered telecom companies to pay their AGR dues in 10 years. The court, however, said that they have to pay 10 percent of the total payout by March 31.
The 10-year timeline for payment of AGR dues will begin from April 1, 2021. Telecom companies were demanding a timeline of 15 years while the government had suggested to give them 20 years. The apex court also mandated the MDs and chairmen of the telecom companies to submit an affidavit. Bank guarantees will also be kept alive till payments begin, the court said.
The three-judge bench added it will drop existing contempt cases against telcos but went on to say that if installments are not paid, it will restart the contempt proceedings. Following the verdict, the share of Vodafone Idea slumped 14.92 percent to Rs 8.67 while Bharti Airtel surged 4.68 percent to Rs 538 following the verdict.
Other telecom stocks were also trading with cuts. Optimus, HFCL, OnMobile, Bharti Infratel, Sterlite Tech, Reliance Communications, and ITI fell in the range of 2-4 percent.
Shares of banks, which have high exposure to telecom companies, were relatively unaffected. Nifty Private Bank was up 0.2 percent and Nifty PSU Bank dipped 0.79 percent.
Nifty Bank was up 0.24 percent. The court left the decision on whether to include the sale of spectrum in the IBC process to NCLT.