This Tata Group stock surges over 13% after govt waived bank guarantees for telecom operators; check details

Tata Teleservices stock surged as much as 13.2% to hit an intraday high of ₹78.2 on the NSE on Tuesday. This is the third consecutive session of gains for the share price, during which it has jumped 16% cumulatively.

Tata Teleservices, a subsidiary of the Tata Group, provides telecommunication services across Maharashtra for mobile and fixed-line connections. The company has been posting losses for the past several consecutive quarters.

Analysts say that the Cabinet’s decision to waive off bank guarantees would be a huge positive for telecom companies, especially those struggling with financial issues. It may improve cash flow of these companies and enable greater network investment.

Reacting to the development, shares of other telcos also shot up. The Vodafone Idea stock climbed as much as 19% to ₹8.28, while Mahanagar Telephone Nigam Ltd (MTNL) surged almost 9% to ₹51.45 apiece on the NSE. Indus Towers Ltd also gained 5.5% to hit the day’s high of ₹355.85. Bharti Airtel Ltd opened in the green with mild gains, but soon slipped in the red to trade 0.7% lower by noon.

According to reports, the Cabinet’s decision has come after the Cellular Operators Association of India (COAI) urged the government to revoke bank guarantee requirements for telecom operators on spectrum purchased before 2022. The telecom reforms introduced in 2021 had removed the bank guarantee requirement for spectrum bought from 2022, but telcos were still required to provide guarantees for deferred payments on pre-2022 spectrum.