New telecom firm promoter scrips fall, older one's gain on SC order

Stocks of firms that face cancellation of telecom licences after a Supreme Court order, which fell sharply in intra-day at Indian stock markets Thursday, managed to pare losses, even as those of established player registered gains.

The sharpest fall at the Bombay Stock Exchange (BSE) was seen in the scrip of Unitech, one of the promoters of telecom operator Uninor, whose managing director Sanjay Chandra is a co-accused in the 2G scam. The scrip was down a whopping 14.07 percent at Rs.23.20.

It, however, managed to pare some of its losses and closed the day with a 7.04 percent loss at Rs.25.10.

DB Realty, which floated Swan Telecom -- also a beneficiary of the licence allocation process and whose promoter Shahid Balwa is another co-accused in the case -- saw its scrip fall 8.62 percent to an intra-day low of Rs.57.20. At closing, it was down 0.42 percent at Rs.62.30.

The stocks reacted negatively soon after the Supreme Court ordered cancellation of all 122 licences granted during the tenure of former communications minister A. Raja, who is in jail and faces trial in what has been alleged as India's biggest scam.

The court, taking note of the arbitrary manner in which licences were granted, slapped a cost of Rs.5 crore each on Unitech, Swan Telecom and Tata Teleservices and said half of that will go to the court's legal aid services and the remaining to defence services.

Varying costs have been imposed on other companies also. Among the other companies that were granted licences during Raja's regime was Videocon, which saw its scrip fall 4.29 percent to an intra-day low of Rs.166.10. It closed Thursday at Rs.171.95, down 0.92 percent.

Even though Reliance Communications was not among the 122 tainted companies, its scrip also lost some 9.31 percent to an intra-day low of Rs.91.05. It pulled up from the low to close at Rs.96.85, down 3.54 percent.

But Bharti Airtel, another of the older players, gained 8.82 percent to touch an intra-day high of Rs.392.95. It closed 6.88 percent higher at Rs.385.95.

Idea Cellular closed with a 2.68 percent gain at Rs.95.85. The BSE's telecom index, in fact, led the 13 sectoral indices.

The BSE's sensitive index, comprising a basket of 30 stocks, also closed in the green at 17,470.7 points, with a gain of 170.12 points, or 0.98 percent, over the previous day's close.