Telcos have very stretched balance sheets: : ASK Investment

In a chat with ET Now, Prateek Agarwal, CIO, ASK Investment Managers, shares his views on telecom sector.

ET Now: The cabinet is now okay at the spectrum reserve price at about Rs 14,000 crore, do you think that is something going to be taken well by the telecom pack?

Prateek Agarwal: Most of the telecom companies have very stretched balance sheets, so let us see how it happens. In the absence of any equity infusion, it may be very difficult for banks to lend to India-only-telecos. For telecos who have other businesses and their corporate guarantees itself would get them lending in India either through overseas banks or through some of the larger Indian banks. The standalone India-only-telecos that do not have any other business elsewhere, may just find it a bit too difficult. That is our sense we may see some amount of equity infusion into the telecos that would be warranted or else banks may just find it bit difficult to lend. So except for top two, others may have some degree of difficulty. But yes, if the payments are deferred over a period of time then it could be taken as a positive.