Shares of Bharti Airtel today soared nearly 11 per cent before ending higher by over 1 per cent after the country's largest telecom operator announced acquisition of smaller rival Telenor India.
The stock surged 10.93 per cent to Rs 400.65 in intra-day trade on BSE. It, however, later surrendered most of the gains to end at Rs 366.05, up by 1.36 per cent over the previous close.
At NSE, shares of the company rose by 1.45 per cent to Rs 366.25 at close.
On the volume front, 21.40 lakh shares of the company were traded on BSE and over 3 crore shares changed hands at NSE during the day.
Airtel today said it has "entered into a definitive agreement with Telenor South Asia Investments Pte Ltd to acquire Telenor (India) Communications Private Limited."
"We expect consolidation in industry to lead to lower costs thereby improving profitability. However, we do not foresee any relief in competition as players aspire to improve their market share and voice market is still prone for disruption," Edelweiss Securities said in a report.
In a separate statement, the Norwegian multinational Telenor said that the transaction will not trigger any impairment. "As of fourth quarter 2016, the remaining value of tangible and intangible assets in Telenor India amounted to NOK 0.3 billion. The transaction is expected to close within 12 months," Telenor said.
Airtel is India's largest wireless operator with over 269 million subscribers and a revenue market share of over 33 per cent.
As the new owner, Airtel will take over Telenor India's spectrum, licences and operations, including its employees and customer base of 44 million in seven telecom circles.
Meanwhile, shares of other telecom players also advanced with Idea Cellular soaring 6.40 per cent, RCom by 3.22 per cent and Tata Teleservices by 2.65 per cent.
Reports of merger have fuelled rally in these stocks also.
Disclaimer: No Business Standard Journalist was involved in creation of this content
