This package has come at a time when the sector is struggling with the entry of Mukesh Ambani’s Reliance Jio.
Shares of Vodafone Idea Ltd rose nearly 20% on Thursday, while banks exposed to the troubled telecom firm also climbed, a day after India’s federal cabinet approved a relief package for the cash-starved sector. .
The relief package includes a four-year moratorium on airwaves payments, as the government has increased the tenure of airwaves held by firms from 20 to 30 years, and complete freesharing of spectrum between carriers.
The government would also change the controversial definition of adjusted gross revenue (AGR) to calculate telecommunications revenue only, after long conceding that companies’ non-telecom revenue was also a part of AGR – roughly $$ for wireless carriers. 13 billion bill.
The dues added to trouble in a sector that was already grappling with the entry of billionaire Mukesh Ambani’s Reliance Jio, sparking a price war that forced some rivals out of the market and turned profits into losses.
Shares of Vodafone Idea climbed 20% to their highest level since June 29, while Bharti Airtel soared up to 1.4% before losing early gains.
According to Nomura, IDFC First Bank, Yes Bank and IndusIndBank, which have respective exposures of 3%, 2.4% and 1.7 per cent in Vodafone Idea, climbed between 2% and 8%.
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