Telecom Stocks in Green; Vodafone, MTNL Lead the Way

Telecom stocks witnessed a sharp rally in today's trading session as the centre waived off bank guarantees for telecom operators. While Vodafone Idea surged by 15% at ₹8, MTNL was up by 9% at ₹51.45 apiece. Bharti Airtel was trading at ₹1583.5, up 0.30%.

The move has come as a relief to Vodafone Idea, as the company owes bank guarantees (BG) to the tune of ₹24,700 crore, sources said. Together, Airtel and Vodafone Idea owe more than ₹30,000 crore as BG.

The waiver of bank guarantees are related to spectrum purchased by telecom operators before 2022, Moneycontrol reported.

Notably, Cellular Operators Association of India (COAI) has requested the government to revoke bank guarantee (BG) requirements for telecom operators who purchased the spectrum before 2022.

While the 2021 telecom reforms aimed at removing the BG requirement for spectrum, which were bought from 2022 onwards, operators still owe BGs belonging to pre-2022 spectrum. Vodafone recently missed BG payments of ₹350 crore in November.

As of now, Airtel and Jio, Vodafone Idea are planning to raise ₹25,000 crore in BGs or letters of credit. During the September quarter, consolidated loss reduced to ₹7,176 crore as compared to ₹8,737 crore in the corresponding year last year. Revenue from operations surged to ₹10,932 (Q2 FY25) crore as compared to ₹10,716 crore in the previous year.