‘Ambani hedge’ sinks Bharti Airtel, Idea Cellular

Palak Shah Mumbai | Updated on January 11, 2018

‘Ambani hedge’ is the new strategy for traders on Dalal Street. Incumbent telecom operators Bharti Airtel and Idea Cellular on Friday lost around ₹6,000 crore in market capitalisation as their rival and India’s oil-to-telecom czar Mukesh Ambani unveiled the round two of an aggressive marketing push of his new telecom venture Jio.

Idea Cellular which was trading at around ₹95 crashed by 6 per cent to touch a low of ₹88 as Ambani began his presentation in Mumbai at the annual general meeting of Reliance Industries, the company that hosts Jio. Similarly, Bharti Airtel too fell over 3 per cent to touch a low of ₹403 from the day’s high of ₹417, on the BSE.

On an earlier occasion too, both the stocks were casualties of Ambani’s Jio launch speech last year.

In September 2016, Ambani who was holding the 42nd AGM of RIL, announced the launch of Jio and also the colossal freebies for customers on the network. This saw both Bharti Airtel and Idea Cellular lose ₹9,800 crore and ₹2,450 crore, respectively.

“Going short on rival telecom operators of Jio and long on Reliance Industries, which operates Jio, is a sure hedge to make money on the day of Reliance AGM,” a Mumbai-based broker told BusinessLine.

The share price of RIL rose by close to 4 per cent to its annual high of ₹1,588.

Published on July 21, 2017

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