Bharti Airtel shares and Vodafone Idea shares fall

Today’s one of the biggest news from the Stock market and investment world is Bharti Airtel shares jump by 5%. Relatively, this comes after Integrated Core Strategies acquires Rs. 3.80 crores shares of Bharti Airtel. The average price of each share was Rs. 513.80. The total deal happened of Rs. 1952.9 Crore.

Integrated Core strategies Pvt Ltd. is a Singapore based investment company and it has bought 38 million shares of Bharti Airtel at an average price of Rs. 513.80 as confirmed by the stock exchange today. On the other hand, on Monday Bharti Airtel lost close to 1.98% and closed at Rs. 513.10.

Supreme Court Verdict on Adjusted Gross Revenue:

The news comes after the much-awaited verdict of the Supreme court on September 1, 2020, regarding adjusted gross revenue.  Additionally, the Supreme court in its verdict stated that it has allowed telecom companies for staggered payment of adjusted gross revenue (AGR) which were due for over 10 years. The 10-year payment timeline will begin from April 1, 2021. It has further stated that every year by February 7, payment should be made.

Telecom companies will submit an undertaking to pay AGR as per the Supreme Court order and will pay 10 percent upfront. Further, the announcement of paying AGR dues over 10 years is positive for telecom shares and stocks like Bharti Airtel.

Since the Supreme Court has not mentioned anything about the dues of Reliance Communications, Vodafone, and Aircel, it is positive news for Bharti Airtel and Reliance Jio. Though question strikes about the sustainability of Vodafone. Additionally, the court also stated that failing to pay the AGR dues would attract penalties and interest charges.

AK Prabhakar of IDBI Capital Market stated ” Bharti Airtel will have better stand to pay. However, Vodafone’s idea may struggle. It may so happen that Vodafone Idea may go out of the game. Banks that have exposure to Idea also reacted negatively today”.   

Bharti Airtel and Vodafone Idea made heavy provisions with respect to AGR dues in March and June quarters of 2020. As noted they both reported losses in both the quarters.

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