The consolidation in the telecom space continues to cheer investors. The BSE Telecom Index on Thursday rose by 1.82% after share prices of Bharti Airtel and Idea Cellular rallied. Bharti Airtel and Idea Cellular together constitute more than 60% of the index. Bharti Airtel’s shares rallied by more than 11% and hit its 52-week high of R400.65 intra-day after the company announced that it has entered into a definitive agreement with Telenor South Asia Investments to buy its India unit. As per the agreement, Bharti will get all Telenor India assets, including airwaves and customers, the company said in an exchange filing.
However, the stock gave up its initial gains and closed at R366, a gain of 1.36% from its previous day close. For the nine months ended December 2016, Bharti Airtel had posted a profit of R3426.40 crore, a decline of 28% year-on-year.
Airtel’s acquisition of Telenor is a part of the larger consolidation happening in the Telecom Industry after the entry of Reliance Jio in September 2016. In a filing to exchanges last month, Idea Cellular had said it was in talks with Vodafone for a merger.
Idea Cellular’s stock has been rising ever since reports came out about its merger with Vodafone. Idea’s stock has rallied 22% in the last month and 60% since the beginning of the year till date.On Thursday Idea Cellular’s share price rose by 6.40% and closed the session at Rs 119.65.
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The surge in share prices of Idea and Airtel also rubbed onto that of its peers and share price of Reliance Communications rose 3.22%, and Tata TeleServices rose by 2.65%.
During the period from September to December 2016, Telecom index had fallen by 9%, however from its December lows Telecom index has rallied over 21% till date.