Sensex in 4-day Selloff; Telecom Regulator Proposes One-time Fee

Devan Biswas
10 Feb, 2011
New York City

Stocks in Mumbai fell for the third day in a row and the benchmark index fell 0.7%. The Sensex index fell 4% in the three-day sell off. Telecom companies declined after the regulator proposed one-time fee for 2G radio spectrum that may cost industry $1.3 billion. Weekly wholesale inflation declined.

[R]5:20 PM Mumbai – Stocks in Mumbai fell for the third day in a row and the benchmark index fell 0.7%. The Sensex index has fallen 4% in the three-day sell off. Telecom companies declined after the regulator proposed one-time fee for 2G radio spectrum that may cost industry as much as $1.3 billion. Weekly wholesale inflation declined.[/R]

Stocks in Mumbai trading declined for the third day in a row and lost nearly 4%. Telecom companies declined for the third week in a row after regulators propose one time charge to recover fees for the sale of second generation license fees.

The BSE Sensex declined 0.7% or 129.73 to close at 17,463.04 The CNX Nifty on the National Stock Exchange decreased 27.75 to close at 5,225.80.

The inflation index showed a mild decline in the data for the week ending on January 29. Primary articles price index or wholesale inflation declined to 16.24% from 18.44% and food price index fell to 13.07% form 17.05% at the end of previous week.

Telecom Regulatory Authority of India proposed a steep rise in second generation mobile radio waves. Vodafone Essar and Bharti criticized the payment but private analysts confirm that the increases in fees are inevitable.

The proposal from the TRAI is non-binding to the government includes a market price for the 2G radio waves that are free to the current mobile operators.

Vodafone Essar criticizing the deal said in a statement that its fees would total to RS 1,783 crore or $383 million and estimated the cost to Bharti Airtel to 4,000 crore or $900 million.

Reliance Communications fees was estimated at RS 70 crore as the telecom operator largely uses CDMA network and only recently expanded to GSM network standard.

GMR Swings to Net Loss

GMR Infrastructure reported a net loss in the quarter to December of Rs 22.25 crore compared to Rs 9.20 crore a year ago quarter.

The infrastructure developer said income from operations rose nearly 27% to Rs 1,358.78 crore from 1,066.72 crore a year ago.

Stock Movers

EPC Industrie Limited surged 19.9% to Rs 76.95 after the irrigation and industrial infrastructure reported Mahindra and Mahindra will acquire 38% stake in company.

GMR Infrastructure Limited surged 13.7% to Rs 36.10 after the holding company’s group official told operating margins for Delhi airport may improve to over 40% once the regulator decides the tariff structure.

Honda Siel Power Products Limited declined 7.7% to Rs 331.05 after the generator and pumps maker reported third quarter net profit plunged 43% to Rs 6.45 crore and net sales fell 2.3% to Rs 102.25 crore.

Reliance Infrastructure Limited soared 9.4% to Rs 585.25 after six companies in Anil Dhirubhai Ambani group recover from the previous session''s sell-off. Anil Ambani in a statement to media said “unscrupulous competitors” were spreading rumors that are not based in facts.

Earlier NDTV Profit said in a report that India’s chartered accountant group had sought information from the company auditors. The group denied it made such a request.