When Bharti was pursuing the deal, the markets were concerned about its implications and the resultant uncertainty had led to its shares underperforming the market by a wide margin. Now that the deal has been called off, investors are waking up to the reality there are no near-term triggers for the stock. Hence the sell-off.

There have been a slew of brokerage reports after the deadline for the Bharti-MTN talks expired. A number of them from brokers such as CLSA, Kotak Securities and HSBC have effectively said that the end of talks is a disappointment. A CLSA research note stated, “We had viewed the Bharti-MTN deal as one that would have added value to shareholders, by helping Bharti sustain an extended period of high growth and high returns."

It’s not that Bharti can’t pursue other global deals, but as CLSA’s analysts point out, there are few potential target assets that are comparable to MTN in size, profitability and opportunity.

For now, Bharti’s investors will have to be content with the India story, which is far from exciting. The glory days are clearly over as far as the Indian telecom market is concerned. The majority of new subscribers is from small towns and rural areas and generates relatively low returns for firms. This shift in the market has coincided with a significant increase in competition.

The HSBC report notes, “Bharti recently cut its rates by about 10% for on-network calls, and all the major incumbents responded to this move immediately. We believe that such rapid cuts in prices are negative, as this can aggravate investor concerns about industry fragmentation and irrational pricing."

Bharti’s shares have been behaving like a defensive in the recent past—underperforming in a rising market and outperforming when the markets fall. This trend is likely to continue in the absence of any near-term triggers. The downside for the stock may be limited given its leadership position and the fact that it is still the preferred play among foreign investors to participate in the Indian telecom story.

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