The participation in this spectrum auction was largely driven by the renewals of the expiring spectrum in the 900 MHz and 1800 MHz bands; coupled with some purchases in the 2100 MHz and 2500 MHz bands to strengthen the network.
Airtel acquired airwaves worth Rs 6,856.76 crore.
Follow our market blog to catch all the live actionBharti Airtel and Vodafone Idea successfully renewed their expired spectrum in the 900 MHz and 1,800 MHz bands.
Additionally, telcos acquired an extra 87.2 MHz worth Rs 6,164.88 crore to enhance their services.
Vodafone Idea secured spectrum worth Rs 3,510.4 crore.
Telecom auction 2024
Telecom stocks are in focus on June 27, a day after an auction of radiowaves that carry voice and data signals for mobile phones ended, garnering less than 12 percent of the Rs 96,238 crore minimum value that the government had estimated for the spectrum on offer. The auction concluded with the majority bids for renewals and some for capacity expansions.
The participation in this spectrum auction was largely driven by the renewals of the expiring spectrum in the 900 MHz and 1800 MHz bands; coupled with some purchases in the 2100 MHz and 2500 MHz bands to strengthen the network. "Apart from these, there was no activity in other bands," said Ankit Jain, Vice President and Sector Head - Corporate Ratings, ICRA.
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Bharti Airtel emerged as the top bidder in the recent spectrum auction, securing around 60 percent of the Rs 11,341 crore worth of radio waves sold. Airtel acquired airwaves worth Rs 6,856.76 crore.
At 9:21 am, Bharti Airtel shares were trading half a percent down at Rs 1,452.85 apiece on the National Stock Exchange (NSE).
Follow our market blog to catch all the live action
Bharti Airtel and Vodafone Idea successfully renewed their expired spectrum in the 900 MHz and 1,800 MHz bands. Additionally, telcos acquired an extra 87.2 MHz worth Rs 6,164.88 crore to enhance their services.
The unsold spectrum will be put up for auction again next time. Available spectrum in various bands including 800 MHz, 900 MHz, and others were offered in this auction.
Reliance Jio obtained spectrum valued at Rs 973.62 crore. Shares of Jio parent Reliance Industries (RIL) were also down nearly half a percent at Rs 3,014.55 apiece on NSE. JPMorgan reiterated an overweight (OW) rating on RIL stock and raised the target price to Rs 3,320.
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Also Read | Bharti Airtel acquires 97 MHz spectrum through auction for Rs 6857 crore
The brokerage highlighted that expectations of a tariff increase are bolstering the telecom sector, which should now be factored into future forecasts.
Analysts at JPMorgan anticipate that any upside following the upgrade in telecom expectations will necessitate a higher valuation for Reliance Retail. Additionally, it emphasised that a significant improvement in topline growth in the first quarter will be pivotal.
Vodafone Idea secured spectrum worth Rs 3,510.4 crore. According to Motilal Oswal, Vodafone Idea can opt for either 20 equal installments (of Rs 350 crore each) or upfront payment of minimum of two years and then installments for the remaining 18 years.
This can increase Vodafone Idea's debt by 1.4 percent to Rs 2.3 lakh crore. The annual installment (of Rs 350 crore) will be 2.7 percent of its Ebitda. The stock was trading 0.8 percent higher at Rs 18.17 on NSE.
Also Read | Jio invests Rs 973.63 crore for spectrum expansion in Bihar, West Bengal
Bharti Hexacom made an unexpected acquisition of spectrum valued at Rs 1,000 crore in ongoing auctions, a move expected to enhance its data services. Shares of the recently listed firm fell over 3 percent to Rs 1,216.50 on NSE. Jefferies has downgraded the stock to a hold rating with a target price of Rs 1,290.
Analysts project a maintained revenue and EBITDA compound annual growth rate (CAGR) of 17 percent and 23 percent respectively for FY24-27. However, earnings estimates have been reduced by 4 percent to account for the spectrum acquisition costs. Despite doubling since its April IPO, the stock is currently trading at a multiple of 16x EV/EBITDA.
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