India's Idea Cellular slumps on rising prices in spectrum auction
Updated: Feb 11 2014, 01:14am hrs
Prices for 900 Mhz band mobile phone spectrum in Delhi rose 90 percent. Reuters
Shares of Indian telecom companies slump as rising prices in the spectrum auction are seen reducing potential profit margins. Prices for 900 Mhz band mobile phone spectrum in Delhi rose 90 percent from the floor price by Day 5 of the auction, government data showed late on Friday. Idea Cellular plunges 8 percent, heading towards its biggest single-day fall since May 2010. Bharti Airtel falls 2.7 percent. Morgan Stanley increased regulatory risk forecast for the sector, saying per MHz pricing has moved up around 38 percent in the spectrum auction. The research house lowers its target price for Bharti Airtel by 20 rupees a share to 409 rupees and that of Idea by 16 rupees to 202 rupees a share, while maintaining their "overweight" rating on the sector.