Telecom stocks gain a day after spectrum auction concludes

A day after the spectrum auction ended, the scrips of major telecom companies traded with healthy gains at the Bombay Stock Exchange on Thursday.

The e-auction of radio frequency spectrum, or airwaves, for telecom operators had concluded Wednesday after 19 days and 115 rounds of rigorous bidding with officials placing the provisional estimate of commitments at Rs 1,09,874 crore - the highest ever.

This amount can be considered as a windfall for the government as it has surpassed the previous high of Rs 1,06,200 crore that it had received in the 2010 auction, which was spread over 34 days with 183 rounds of bidding.

The eight companies that participated in the auction were: Reliance Communications, Reliance Jio, Bharti Airtel, Vodafone India, Tata Teleservices, Uninor, Idea Cellular and Aircel.

While shares of Bharti Airtel closed the day's trade 0.98 per cent higher at Rs 398.70, Idea Cellular stocks jumped 4.04 per cent to close the day at Rs 180.40 on the Bombay Stock Exchange.

However, Tata Communications' scrip slipped 0.5% to Rs 404.30 on BSE and Reliance Communications ended the day 1.23 per cent down at Rs 60.40 on the bourse.

Reliance Industries, which participated in the auction through its upcoming subsidiary Reliance Jio Infocomm, saw its shares end 1.67 per cent lower at Rs 830.60 from their previous close.

The winners of the auction will have to pay around a third of the winning bid price within 10 days and the rest by 2027.

On offer were blocks for 69 service areas at a total reserve price of Rs 80,277 crore, and the provisional allocation was announced for 63 of them at a winning price of Rs 1,09,874.91 crore. In 50 service areas, the winning bids went at a premium.