SC order takes toll on telecom scrips

MUMBAI, INDIA: Stocks of firms that face cancellation of telecom licenses after a Supreme Court order fell sharply on Indian stock markets on Thursday, even as those of one established player registered handsome 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 per cent at Rs.23.20.

Also read: SC cancels 122 licenses issued by Raja

DB Realty, which floated Swan Telecom -- also a beneficiary of the license allocation process and whose promoter Shahid Balwa is another co-accused in the case -- saw its scrip fall 8.62 per cent to an intra-day low of Rs.57.20.

The reactions came soon after the Supreme Court ordered cancellation of all 122 licenses 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 licenses 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 defense services.

Varying costs have been imposed on other companies also.

Among the other companies that were granted licenses during Raja's regime was Videocon, which saw its scrip fall 4.29 per cent to an intra-day low of Rs.166.10.

Even though Reliance Communications was not among the 122 tainted companies, its scrip also lost some 9.31 per cent to an intra-day low of Rs.91.05.

But Bharti Airtel, another of the older players, gained 8.82 per cent to touch an intra-day high of Rs.392.95.

The BSE's sensitive index, comprising a basket of 30 stocks, was also ruling in the green at 17,447.98, with a gain of 147.4 points, or 0.85 per cent, over the previous day's close.