Government raises nearly Rs 1 lakh crore in spectrum auction; stocks surge

MUMBAI: Shares of telecom companies surged in trade at the end of round 33 of spectrum auction. The government is a whisker away from netting the Rs 1 lakh crore bonanza following brisk bidding.

According to analysts, the auction is likely to end today as the activity levels are at peak.

The spectrum cost for the Sunil Mittal-led Bharti Airtel tops Rs 20,000 crore, Idea's payout stands at Rs 30,000 crore, Reliance Communications payout at Rs 4,000 crore and Rel Jio's payout at Rs 10,000 crore.

While the government’s kitty will be fat by around Rs 1 lakh crore, the aggressive bidding by telcos will stretch their balance sheets.

"We expect that quite a few of them will end up recapitalising themselves, raising some equity also as they go along. In the long term, it will result in higher prices for the consumers. But all this was inevitable given all the things that have happened in this country over the last four-five years," said Rashesh Shah, Chairman & CEO, Edelweiss Group to ET Now.

According to him, it is good for the government but it is not so good for the telecom companies, but eventually it is not very good for the consumers either.

Bharti Airtel surged 10.5 per cent to touch intraday high of Rs 379.70, Reliance Communications rallied 6.51 per cent and Idea Cellular gained 8.88 per cent.