INSUBCONTINENT EXCLUSIVE:
open interest that climbed to a 14-month high
prospects, with competition easing, analysts said.
Even though Bharti Airtel also has to pay more than Rs 34,000 crore by way of dues,
investors believe a $3-billion fund-raising should help the company meet its commitments
By contrast, many believe that Vodafone Idea, which owes about Rs 44,000 crore in dues to the government, faces a stiffer hurdle
In the event of Vodafone Idea exiting, Bharti Airtel stands to gain market share.
Bharti Airtel climbed 5.5 per cent to Rs 500 on Friday
The stock hit a 52-week high during the session
headed for a duopoly comprising Bharti Airtel and Reliance Jio, brokerages said following a Supreme Court decision to dismiss a petition
seeking a review of its judgment on adjusted gross revenue
Brokerages believe that Airtel's recent $3 billion-fund raising gives it the liquidity to withstand the AGR shock, while it will be
critical to see the way ahead for Vodafone Idea, which has AGR-related dues of more than Rs 53,000 crore
Analysts also said the chances of a curative petition being admitted are slim.Brokerage Take18 Jan, 2020Edelweiss has maintained buy rating
on Bharti Airtel with a target price of Rs 533 and IIFL has cited Reliance Industries and Bharti Airtel as its top picks in the telecom
While Vodafone Idea shares plunged 25% to end at Rs 4.51 on Friday following the verdict, Bharti Airtel's shares jumped 5.5% to Rs 500 and
Reliance Industries' stock gained nearly 3% to Rs 1,580.65.
Here's what brokerages are saying on the way forward for the telecom
industry:
Edelweiss18 Jan, 2020-Market would turn into duopoly in absence of any government intervention
-Government intervention not
ruled out given consequences of further consolidation in telecom
-Chances of curative petition being admitted are slim
IIFL18 Jan,
2020-Government may spread out payments over long period to avoid pushing Vodafone Idea into NCLT
-Chances of relief from curative petition
before January 23 deadline look remote
-Bharti Airtel and Reliance Industries are top picks in sector
Jefferies18 Jan, 2020-Telecom
companies will likely file a curative petition
-Govt is likely to provide relief by allowing staggered payments over a longer
timeline
-Best case for lenders is Vodafone Idea survives long enough and repays loans back
On technical charts, the stock is moving up
It may see a good rally after crossing the Rs 545 level and could see upside of 50 per cent over the longer term, post a sustainable
breakout," said Yogesh Radke, Head of Alternative and Quantitative Research at Edelweiss.
Brokerages also believe the share price will rise
Vodafone Idea and its possible inability to pay the liability, there is a possibility that the telecom industry in India could become
further consolidated into two players
We believe that Airtel will have the ability to pay this liability, given its recent fund raising, and hence could be a key beneficiary of
a target price of Rs 533, given its ability to fund liabilities and gain market share.