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Business News/ Markets / Stock Markets/  Bharti Airtel shares tumble as Gautam Adani enters 5G telecom spectrum auction

Bharti Airtel shares tumble as Gautam Adani enters 5G telecom spectrum auction

Bharti Airtel share price: After Adani group's entry into 5G spectrum auction, telecom companies are expected to lose good amount of corporate business, believe experts

Bharti Airtel share price: some IT companies have also applied for the 5G spectrum auction. (MINT_PRINT)Premium
Bharti Airtel share price: some IT companies have also applied for the 5G spectrum auction. (MINT_PRINT)

Bharti Airtel shares tumbled in early morning session on Monday after  the announcement of Adani group's entry into 5G spectrum auction. Bharti Airtel share price today opened downside and went on to hit intraday low of 661.15 on NSE in early morning deals, logging near 5 per cent dip from its Friday close of 695.15 apiece levels. 

According to stock market experts, Bharti Airtel stocks were sliding due to short term negative sentiment emerged after the entry of Adani group's into the 5G telecom spectrum auction. They said that Adani group hasn't said that they will foray into the telecom space but after their entry into the 5G auction, it is for sure that even if they don't foray into the telecom space, they are going to have their own telecom infrastructure and they won't take services of telecom companies once 5G is rolled out in India.

On how Adani group's entry into 5G spectrum auction is negative for Bharti Airtel shares, Ravi Singhal, CEO at GCL Securities said, "Adani group's entry into 5G spectrum auction is a negative news for Bharti Airtel and Reliance Jio as the telecom companies would lose a good amount of corporate business even if the Adani's decides against foraying into the telecom business. Many IT companies have also applied for the 5G spectrum auction as they are also looking for their personal telecom infrastructure instead of relying on two or three companies that are capable of giving the kind of telecom infra they would need after the 5G roll out in India."

Echoing with Ravi Singhal's views, Punit Patni, Equity Research Analyst, Swastika Investmart said, "The Adani Group’s entry into the 5G spectrum race has spooked Bharti Airtel Ltd investors and the stock has witnessed an enormous sell-off today. This move is expected to increase competition, especially in the Enterprise services segment; however, there will be no impact on the consumer side of the business as the Adani Group clarified on Saturday that the intention to enter the telecom business is not aimed at consumer communication services, but to use 5G spectrum, if awarded for private network solutions. Nonetheless, we are positive on Bharti Airtel Ltd. as the company’s EBITDA margins are expected to rise due to further tariff hikes; this will further improve the company’s ability to generate free cash flows and deleverage its balance sheet. Additionally, the financial position remains strong and the outlay in the upcoming 5g auctions is expected to be reasonable."

On suggestion to stock market investors in regard to Bharti Airtel shares, Ravi Singhal of GCL Securities said, "Bharti Airtel has strong support at 620 apiece levels whereas it has equally strong resistance placed at 700 to 720 per share levels. If the stock falls around 740 levels, then it would be a good buying zone maintaining stop loss at 720 apiece levels."

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Asit Manohar
Chief Content Producer at Live Mint Digital Team
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Published: 11 Jul 2022, 11:50 AM IST
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