Bharti Airtel, Reliance communications and Idea Cellular surged on Wednesday after the Finance Ministry and Reserve Bank of India decided that telecom spectrum be treated as 'tangible security. This came as major boost and relief for telecom firms.
The move which will provides greater security to lenders and clear the air of uncertainty to some extent in the wake of the cancellation of spectrum licences, has come at a time when there is near freeze of bank funding.
Reliance Communications traded 3.9 per cent higher at Rs 69.45, Bharti Airtel gained 1.26 per cent at Rs 312.60, and Ideal Cellular rose 1 per cent to Rs 18.90. In contrast, the broader BSE Sensex traded flat at 16,867 at 10.17 a.m.
The Finance Ministry wants to secure lenders through the incorporation of “a suitable clause in the draft Tripartite Agreement (for assignment of licence) among the Licensor, Licensee and Lender to provide for termination payment to lenders of an amount equivalent to lower of the licence fee mobilised, or secured loan outstanding, in the event of termination of licence allotted to an operator.