The Department of Telecommunications (DoT) has proposed a four-year moratorium on adjusted gross revenue (AGR) and spectrum payments apart from a reduction in spectrum usage charge (SUC) prospectively, among measures to improve the health of the debt-laden sector and retain a three-private player market. Let’s discuss this a bit more and see which are the players which are going to be benefited from this move?
In this article, Specifically we will be discussing about the Vodafone Idea. And will discuss the possibility of the Telecom Sector getting relief from the Government side wherein 4 years of Moratorium period can be implemented by the Government of India for the AGR dues and Spectrum payments. Hence, we will talk about the 2 stocks which should be kept on the radar by the investor, in case of the application of this possibility.
2 Stocks to Watch:
The 2 Direct and major beneficiaries of the possible application of the 4-year Moratorium Plan of AGR and Spectrum Payments are Bharti Airtel and IDFC First Bank. Here Reliance Jio is not considered, as it has not been listed yet.
Vodafone Idea- Debt:
What does 4-Year Moratorium Propose by DoT Suggest?
This financial relief from the side of the Government could act as a measure of relief for Vodafone at least for a shorter period. This reform can also be looked out from the viewpoint of causing no or lesser impact to the financial institutions, there should not be further NPAs creation, which can have a cascading impact as well. It will be an interesting thing to watch, how the company performs post application of this reform if applies. Suggested stock in this article should not be taken as direct advice and hence one should consult the financial advisor before making any investment decisions.