Entry of Reliance Jio Infocomm limited (RJIl) in the 900 mega hertz (MHz) spectrum auction became a reason of stress for the rest of the telecom operators as their stock prices crashed as much as 7 per cent on the BSE.
Scared that RJIl might hurt the market share and inturn dent the profitability of mobile operators, investors and institutions sold shares of the listed companies.
Hit the most, Idea Cellular’s stocks plummeted by 7.25 percent, while Bharti Airtel plunged 4.84 per cent. Similarly, Reliance Communications slid by 4.18 per cent and Tata Teleservices fell by 3.3 per cent. “After RJIl announced its participation in the upcoming 900 MHz spectrum auction, investors are worried it would hamper the plans of other operators to acquire the spectrum,” said Kunal Saraogi from Equity Rush.
The upcoming auction is critical for Bharti Airtel and Vodafone as their licences are about to expire in November 2014. Now with RJIl also in the race and with only 46 MHz spectrum up for auction in the 900 MHz band, share of other operators are sure to be cut down.
Sensex lost all its initial gains and finally ended 24 points down to 21,265.18 while Nifty also closed with marginal loss of 2 points to 6,318.9.