Shares of Mahanagar Telephone Nigam Ltd. led the gains in telecom stocks after government gave its approval to spend about Rs 1.64 lakh crore to revive state-run telecom operator Bharat Sanchar Nigam Ltd.
Telecom suppliers like Tejas Networks Ltd., Sterlite Industries Ltd., HFCL Ltd. also logged gains, while BSNL's business competitors Bharti Airtel Ltd. and Vodafone Idea Ltd. fell.
The government's package involves a cash support of Rs 43,964 crore and non-cash support of Rs 1.2 lakh crore over four years. The bulk of the investments will be done in the first two years, according to Union Telecom Minister Ashwini Vaishnaw.
The government will provide Rs 13,789 crore to BSNL as viability-gap funding for unviable rural wireline operations and convert Rs 33,404 crore statutory dues into equity to ease the burden on its balance sheet.
The cabinet has also approved administrative spectrum for 4G and 5G services for BSNL. The operator, with a market share of nearly 10%, returned to profit for the first time after the government's 2019 package.
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