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Money > Business Headlines > Report April 10, 2002 | 1200 IST |
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2002 spells bad connection for telecom scripsAnusha Subramanian & Janaki Krishnan Telecom and telecom-related stocks have taken a beating on the stock bourses between January 4, 2002, and April 5. The decrease has been in the range of 1 to 39 per cent. The stocks which have depreciated the most are Mobile Telecommunications, Himachal Futuristic Communications, Hughes Tele.Com India, GTL, Shyam Telecom, Valiant Comm, Krone Comm, Punjab Comm, VSNL and Goldstone Technologies. Mobile Telecommunications has seen a dip of 38.73 per cent. The stock took a beating from Rs 20.40 on January 4, 2002, to Rs 12.50 on April 5, 2002. This was followed by HFCL which closed on January 4, 2002, at Rs 93.40, and since then took a beating continuously for the next three months. The stocks are being led by GTS and HFCL, which are largely operator driven. The downgrading of Nortel and Lucent by Standard & Poor's, which has categorised the stocks as junk ones, has also led to poor interest in telecom stocks in the domestic market. Analysts said that in the last three months public sector undertaking stocks have hogged the limelight and all attention in the market has drifted towards these stocks. Since PSU divestment process is unlocking all the hidden shareholder wealth, all categories of investors are eager to participate in the windfall, they said. Bharti float hurts institutional investors Institutional investors, including a clutch of foreign institutional investors, who had subscribed to the book-built issue of Bharti Tele-ventures find themselves facing an erosion of Rs 675.6 million in their investments as on April 5, 2002. They had invested Rs 3.80 billion into the IPO. The institutional investors comprise big names such as Capital International, which had put in the highest amount at Rs 1 billion, Alliance Capital (Rs 900 million), Government of Singapore (Rs 750 million), Unit Trust of India (Rs 500 million) among others. UTI's losses have been to the extent of Rs 88.9 million. Incidentally all the investors had invested with a long-term view. Being a book-built issue it was mostly subscribed to by institutions while retail participation was minuscule. ALSO READ:
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