Telecom stocks are in center as the government approved significant changes in the telecom sector.
Union Cabinet on September 15 declared a moratorium of four years for the payment of the Adjusted Gross Revenue (AGR) dues, giving a relief to the debt-strapped telcos – Vodafone Idea and Bharti Airtel.
With the change measures, the government plans to help the proliferation and penetration of broadband and telecom connectivity in the country. Aside from this the government is hoping to help 4G proliferation, infuse liquidity and establish an enabling environment for investment in 5G networks with the new set of change measures.
Offer cost of Vodafone Idea acquired the most hitting upper circuit on BSE. It was trading at Rs 9.82, up Rs 0.89, or 9.97 percent. It has contacted an intraday high of Rs 9.82 and an intraday low of Rs 9.82. There were forthcoming purchase requests of 28,452,960 shares, without any merchants accessible.
The other telecom gainers included Indus Towers, Reliance Communications, Vindhya Telelink, Sterlite Tech and Bharti Airtel which added 1-6 percent each.
The four year moratorium additionally stretches out to other telecom dues, for example, the due payments of spectrum bought in the past auctions with the exception of the recently concluded auctions earlier this year.
The postponement is protected by an interest component, which the telecom organizations should pay directly from the first day of the initiation of the moratorium period from October 1, at the rate of MCLR in addition to 2 percent.
Vodafone Idea, promoted by Aditya Birla Group and UK’s Vodafone Group, has paid Rs 7854 crore as AGR dues, in the mean time Bharti Airtel has paid Rs 18,000 crore as AGR dues.
Both Vodafone Idea and Bharti Airtel have been attempting to get their AGR dues diminished through legitimate means yet so far the entirety of their efforts have failed. Indeed, the telcos had even moved a review petition for a July order by the Supreme Court which had trashed their supplications for recalculation of their AGR liabilities saying that there have been arithmetical errors with respect to the telecom department in calculating the dues.
A 100% FDI (Foreign Direct Investment) in telecom by means of the automatic route was likewise supported by the Cabinet.
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