Index heavyweight Reliance stock was up around 1 percent as Ambani continued his speech drawing Relaince Jio plans, turned flat and soon slipped into red. Market expert, Ambareesh Baliga is worried that Reliance Jio offerings will not only hurt the incumbents, but would not help Reliance Industries either for next 3-4 quarters.
Shares of telecom majors Bharti Airtel and Idea Cellular took a beating in an otherwise lacklustre market after Reliance Industries Chairman Mukesh Ambani signalled a price war in the telecom sector with free voice calls, cheap data and a free fouth-month trial for its telecom offering Jio.
Bulls showed signs of fatigue after four straight days of gains, and benchmark indices remained in a narrow range right from the start of trade.
Index heavyweight Reliance Industries rose around 1 percent as the company's Chairman Mukesh Ambani spoke about Jio's plans at the annual general meeting. However, the stock failed to sustain gains.
Market expert, Ambareesh Baliga is worried that Reliance Jio offerings will not only hurt the incumbents, but would not help Reliance Industries either for next 3-4 quarters.
The sector will surely see a lot of consolidation and merger and acquisitions and only a maximum of four players may remain. Moreover, only post 12-18 months, the sector will get re-rated. Vodafone will also have to look at pushing its IPO further, says Baliga. “At present, Reliance is basically looking at maximizing its subscriber base and not ARPUs (average revenue per users) as such,” he adds.
However, auto and bank stocks were supporting the market. BSE Auto and Bankex were up 1 percent from previous close. Auto sales in August so far has been firm. Maruti Suzuki , the country's largest passenger vehicles manufacturer, has registered a 12.2 percent growth in August sales, driven largely by Vitara Brezza, Ciaz and some compact cars. It sold 1.32 lakh units during the month against 1.17 lakh units sold in same period last year.
Gainers in auto are Tata Motors, Maruti, M&M and Bajaj Auto while HDFC, SBI, ICICI Bank, Kotak Mahindra and Axis Bank are major gainers in the banking.
Disclaimer: Reliance Jio is a part of Reliance Industries that owns Network 18 Media & moneycontrol.com
Posted by Nasrin Sultana