Mumbai: Led by Bharti Airtel, telecom stocks on Tuesday gained as much as 8.15 percent as sector regulator TRAI recommended a sharp 60 percent cut in the floor price of mobile phone spectrum for an upercentoming auction after two previous sales drew lukewarm response on high reserve price.
Shares of Bharti Airtel jumped 8.15 percent to Rs 339.10, while Idea Cellular jumped 5.56 percent to Rs 167 and Reliance Communications rose by 1.65 percent to Rs 141.80 on the BSE.
"There was a strong buying interest in telecom majors such as Bharti (up 8%) and Idea (up 6%) as TRAI recommended a cut of up to 60 percent in base prices for upercentoming mobile phone spectrum auction," said Milan Bavishi, Head Research, Inventure Growth and Securities.
TRAI made recommendations to the government for the start or base price of auction of spectrum in 900 per megahertz (MHz) and 1,800 MHz bands used by GSM players to offer 2G, which remained unsold after two rounds of auctions in November and March.
It suggested a pan-India reserve price of Rs 1,496 crore per MHz in the 1800 band, down 37 percent from the base price set in the previous auction, TRAI Chairman Rahul Khullar had said.
The reduction in reserve prices follow the failed March auction, which drew just one bidder.