Rs 46,000 cr row: Airtel, Idea Cellular, Reliance Com stocks plunge

The BSE Telecom index fell 2.20% or 28.71 points on Friday after a Comptroller & Auditor General of India (CAG) report said six telecom service providers had under-reported revenues worth Rs 46,000 crore and the Department of Telecommunications (DoT) saying it would issue demand notices for Rs 12,500 crore to these companies. The index closed the session at 1,275.33 points.

Baring OnMobile Global, which closed at Rs 105.90, gaining 0.43% or 0.45 points, all the companies ended the trading session in red. Shares of GTL Infrastructure and GTL were down 6.38% and 5.70%, respectively, to close at Rs 2.79 and Rs 13.89.

Telecom majors such as Mahanagar Telephone Nigam, Bharti Airtel, Idea, Reliance Communications and Tata Teleservices (Maharashtra) among others closed down between 2% and 4% from their previous closes.

According to the CAG report, six telecom service providers which include Bharti, Vodafone, Aircel, Reliance, TATA and Idea have under-reported revenues worth Rs 46,000 crore. The DoT will be issuing a demand notice of Rs 12,500 crore to these operators.

The report pertains to four years – 2006-07 to 2009-2010 – which is before the tenure of the current government, a press release issued by the department said.

Closing at a one-week low, Bharti Airtel was down 2.28%, losing 8.30 points, while Idea closed down 2.86%, a near two-week low.

Ahead of the June quarter results session, a Kotak Institutional Equities report expects Bharti India Wireless to witness a robust quarter. The report also said Idea is likely to report a weak quarter with sustained pressure on volume growth and a likely margin dip on a quarterly basis.2

IDEA Cellular Limited

Reliance Communications (RCOM)