Project on Indian Capital Market

8/6/2019 Project on Indian Capital Market

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Report on

A Comparative Study on the Stock Price Listing of Telecom Companies

Submitted By:

Akhil Bhadrecha Ajay SharmaAnshul Kumar Jubin Modi

Saurabh Tamrakar Vivek Bohra&

Tapan JainSection E(PGP 11)


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ACKNOWLEDGMENT

We express our hearty gratitude to Ms. Sandhya Prakash , faculty (Department of Finance) IILMInstitute for Higher Education Gurgaon for his excellent guidance, constant advice and grantingpersonal freedom in the course of this work.

Lastly, We are thankful to all those, particularly the various friends , who have beeninstrumental in creating proper, healthy and conductive environment and including new andfresh innovative ideas for us during the project. Without their help, it would have been

extremely difficult for us to prepare the project in a time bound framework.

Akhil BhadrechaAjay Sharma

Anshul KumarJubin Modi

Saurabh TamrakarVivek Bohra


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CONTENTS

y Executive Summary

Introduction

Impact of budget on Telecom sector

Major players in Telecom sector

Companies overviews

R eliance Communications

MTNL

Tata Communications

Variation in NIFTY Indicator

Stock Listing and Related news of

R eliance Communications

MTNL

Tata Communications

Comparative stock variation of all 3 companies

References


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Executive Summary

The Project is on the Analysis of the Stock Price of three companies of Telecom sector. Theproject was on the task of ascertaining the fluctuation of the stock price of companies in chosensector. We have taken the Telecom Sector for our project and the stock of Tata communication,MTNL, and R eliance communication respectively for this comparative analysis. The reasonbehind taking this sector for analysis was the budget 2010 in which Finance Minister increasedthe allocation of investment in this sector. And these three companies were showing a constanttrend in the post budget era of the Market. The stocks of these companies are ending flatwithout showing a big fluctuation in their price.

India s telecom sector is one of the world s fastest growing sectors. The industry hasmaintained its growth momentum despite a slowdown seen across various sectors. India hascrossed the 500 million wireless subscriber mark in November last year. With the increase inthe number of players and reduced tariffs, this number is expected to soar. Overall tele-densityhas touched 46.32, a whopping 250% jump in the last four years.

In this Project we have tried to find out the fluctuation of stock price and the impact of news onthe stock price of these companies. The Telecom sector is a sector which is at a booming stageand these companies hold a major chunk in this sector sharing with various other players likeAirtel and Idea cellular etc. However, most of the telecom companies welcomed severalinitiatives by the government that will assist the country to see more investments andimprovement in GDP growth


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Telecom Sector in India

India's telecom sector has shown massive upsurge in the recent years in all respects of industrial growth. From the status of state monopoly with very limited growth, it has grown in

to the level of an industry. Telephone, whether fixed landline or mobile, is an essentialnecessity for the people of India. This changing phase was possible with the economicdevelopment that followed the process of structuring the economy in the capitalistic pattern.R emoval of restrictions on foreign capital investment and industrial de-licensing resulted in fastgrowth of this sector. At present the country's telecom industry has achieved a growth rate of 14 per cent. Till 2000, though cellular phone companies were present, fixed landlines werepopular in most parts of the country.

With government of India setting up, Telecom R egulatory Authority of India measures to allow new players country, the featured products in the segment came in toprominence. Today the industry offers services such as fixed landlines, WLL, GSM mobiles,CDMA and IP services to customers. Increasing competition among players allowed the pricesdrastically down by making the mobile facility accessible to the urban middle class population,and to a great extends in the rural areas. Even for small shopkeepers and factory workers aphone connection is not an unreachable luxury. Major players in the sector are BSNL, MTNL,Bharti Teleservices, Hutchisson Essar, BPL, Tata, Idea, etc. With the growth of telecom services,telecom equipment and accessories manufacturing has also grown in a big way.

Impact of Budget 2010 on Telecom Sector

Telecommunications has emerged as one of the key sectors responsible for India's resurgenteconomic growth. The sector was relatively untouched by the economic slump thatbeleaguered India in the FY09 and the early part of FY10.

The telecom policy objectives focus on network expansion, rural telephony, roll-out of 3-Gservices, enhanced broadband coverage, R &D, domestic manufacturing of telecom equipmentand a supportive environment for the competitive growth of the sector.

R ural and Semi-urban India are the next target for most telecom companies since urban Indiahas been largely tapped. A R PUs are expected to decrease further as rural subscriber baseincreases but volumes are expected to slightly compensate for the fall in A R PUs.FY10 witnessed

the launching of services by the new operators in collaboration with their foreign partners whohave technical expertise as well as financial strength. The sector has seen a fall in margins formost of the existing players due to intense competition. The success of these operators wouldbe determined by the spectrum allocation policy of the Government of India (GoI).


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The outstanding issues before the GoI include additional spectrum allocation for 2G, freshspectrum allocation for 3G and WiMax, multiple levies on the sector, increase in ruralconnectivity and mobile number portability.

Key Players in Indian Telecom SectorsThe telecom industry of India has registered manifold growth in the recent years. Personalizedtelecom access is essential necessity of life for increasing number of the people. The sectoroffers unlimited prospects when we consider future growth. Both Public Players and PrivatePlayers are enhancing their technologies and taking the telecom industry to a much highergrowth state. Not only service providers but also handset manufacturers are contributingsignificantly to the industry and economy of India.

The top players in the industry are:

1) R eliance Communications Limited2) Bharti Airtel Limited3) BSNL4) MTNL5) Hutchison Essar6) Ericsson7) Nokia8) Siemens Communications9) Idea Cellular Limited10) Tata Teleservices


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Mahanagar Telephone Nigam Limited

MTNL was set up on 1st April, 1986 by the Government of India to upgrade the quality of telecom services, expand the telecom network, and introduce new services and to raiserevenue for telecom development needs of India's key metros- Delhi, the political capital andMumbai, the business capital of India. In the past 23 years, the company has taken rapid stridesto emerge as India's leading and one of Asia's largest telecom operating companies. Besideshaving a strong financial base, MTNL has achieved a customer base of 8.06 million as on 31stMarch 2009.

The company has also been in the forefront of technology induction by converting 100% of itstelephone exchange network into the state-of-the-art digital mode.

The Govt. of India currently holds 56.25% stake in the company.

y Arun Prajapati Deputy Manager

y Alka S Asthana DGM GSM

y K P Ravindra Kumar Sr Manager ( R oaming VAS) BD and 2.5G/3G Project Coordination

y SUNIL SONKAR ASSISTANT MANAGER

y Sandeep Keshkar DGM


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Stock Price variation

Date(MM/DD/YY)

PreviousClose Open High Low Close

Total TradedQuantity

Turnoverin Lacs

%Change

03/02/10 71.85 72.5 72.9 71.75 72.15 913831 659.49 0.42

03/03/10 72.15 72.6 74.15 72.35 73.35 878628 643.45 1.66

03/04/10 73.35 74.4 74.9 73.05 74.35 977186 725.36 1.36

03/05/10 74.35 75 76.35 74.4 75.4 1106018 835.48 1.41

03/08/10 75.4 75.8 76.5 74.8 75.05 461400 349.2 -0.46

03/09/10 75.05 75 75.15 73.2 73.6 464310 343.88 -1.93

03/10/10 73.6 74 74.55 73.1 74.3 610708 451.8 0.95

03/11/10 74.3 73.6 77 72.2 72.9 466522 343.34 -1.88

03/12/10 72.9 72.4 74.25 72.05 72.75 466522 341.84 -0.21

03/15/10 72.75 74.4 74.4 71.75 71.95 553005 398.85 -1.1

03/16/10 71.95 73.9 73.9 71.95 73.1 367350 267.01 1.6

03/17/10 73.1 73.5 73.9 72.4 72.6 343912 251.4 -0.68

03/18/10 72.6 73.6 73.6 72.15 72.7 1093137 793.08 0.14

03/19/10 72.7 73.4 76.95 73.2 75.2 2910751 2185.93 3.44

03/22/10 75.2 75.15 75.85 73.15 73.4 1495600 1118.19 -2.39

03/23/10 73.4 74 75 72.55 72.8 831887 610.45 -0.82

03/25/10 72.8 73.05 73.5 72.2 72.35 1165841 845.74 -0.62

03/26/10 72.35 72.5 73 72.1 72.35 380060 275.93 0

03/29/10 72.35 73 74.3 72.55 73.3 795429 584.64 1.31

03/30/10 73.3 74.2 75.35 73.55 73.75 1099481 819.59 0.61

03/31/10 73.75 79.3 79.3 73 73.2 558092 410.33 -0.75


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Related News

Indian ADRs: MTNL up 3% Published on Thu, Mar 11, 2010 at 07:35

Indian ADR s ended higher, barring a couple of stocks. In the banking space, HDFC Bank was up4.62% at $ 132.81 and ICICI Bank was up 0.15% at $ 40.91. In the telecom space, MTNL was up3.1% at $ 3.33 while Tata Communication remained unchanged at $ 12.85

MTNL tax refund

New Delhi, March 19: State-run Mahanagar Telephone Nigam Limited (MTNL) will get a taxrefund of R s 1,380 crore following a direction by the income tax appellate tribunal. The tribunalhas directed the I-T department to refund R s 756 crore to MTNL as tax and R s 624 crore asinterest on it for four assessment years. The windfall tax refund will enable the firm to investmore on its expansion plans.

MTNL Debuts ROK iPlayerApr 01, 2010 1302 hrs IST

MTNL has tied up with UK-based R OK Entertainment Group, a mobile technology andApplications Company, to launch R OK's mobile video service "iPlayer" in India.MTNL userswould be able to watch streaming videos or download video content on to their phones.

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For a monthly rent of R s. 30, users can download up to 90 clips to their phones. The contentranges from breaking news stories to daily astrology predictions, Bollywood news, Bollywoodmusic, sports news, comics and comedy clips.

After subscribing to the service, all you need to do is to visit the following link using your

phones' default browser.

MTNL has begun promoting the R OK iPlayer service to their 2 million customer base in Mumbaithrough SMS on a daily basis. The service as of now is available only in the MTNL Mumbai circle.

Reliance Communications

R eliance Communications Limited founded by the late Shri Dhirubhai H Ambani (1932-2002) isthe flagship company of the R eliance Anil Dhirubhai Ambani Group. The R eliance Anil DhirubhaiAmbani Group currently has a net worth in excess of R s. 63,000 crore (US$ 14 billion), cashflows of R s. 12,000 crore (US$ 3 billion), net profit of R s. 8,000 crore (US$ 2 billion) and zero netdebt.

R eliance Communications is India's foremost and truly integrated telecommunications serviceprovider. The Company, with a customer base of around 71 million including over 2 millionindividual overseas retail customers, ranks among the Top 10 Telecom companies in the worldby number of customers in a single country. R eliance Communications corporate clienteleincludes 2,100 Indian and multinational corporations, and over 800 global, regional anddomestic carriers.

R eliance Communications has established a pan-India, next generation, integrated (wireless

GSM ^ CDMA Both ) and wireline), convergent (voice, data and video) digital network that iscapable of supporting best-of-class services spanning the entire communications value chain,covering over 20,000 towns and 450,000 villages. R eliance Communications owns and operatesthe world's largest next generation IP enabled connectivity infrastructure, comprising over175,000 kilometers of fiber optic cable systems in India, USA, Europe, Middle East and the AsiaPacific region.


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Stock price variation

Date(MM/DD/YY)

PreviousClose

Open High Low CloseTotal

Traded

Quantity

Turnoverin Lacs

%Change

03/02/10 157.55 158.35 160.9 157.85 159.65 3013099 4797.54 1.33

03/03/10 159.65 160 161.45 159.75 160.85 1548753 2491.1 0.75

03/04/10 160.85 160 164.85 160 164.25 2773312 4530.18 2.11

03/05/10 164.25 165.5 167.4 164.55 165 2381251 3951.07 0.46

03/08/10 165 166.2 167.3 163.1 163.9 1803840 2979.44 -0.67

03/09/10 163.9 164 164.7 162 162.8 1113349 1817.66 -0.67

03/10/10 162.8 162 164.9 162 162.85 1779061 2905.13 0.03

03/11/10 162.85 163.2 163.35 159.2 160.5 2817940 4543.08 -1.44

03/12/10 160.5 160.9 162.65 156.65 157.5 3238999 5149.7 -1.87

03/15/10 157.5 159.7 160.55 157 158.2 2852055 4535.32 0.44

03/16/10 158.2 159 161.45 157.9 160.5 1749672 2789.76 1.45

03/17/10 160.5 164 164 159.7 161.1 2247822 3640.76 0.37

03/18/10 161.1 161.8 164.9 161 164.45 2924631 4780.2 2.08

03/19/10 164.45 165 168.45 164.9 167.95 3497611 5840.95 2.13

03/22/10 167.95 165 172.9 165 171.1 5010107 8528.93 1.88

03/23/10 171.1 171.5 173.8 167.4 170.55 4185224 7116.32 -0.32

03/25/10 170.55 170 172 168.2 169.1 4180060 7086.71 -0.85

03/26/10 169.1 169.9 170.5 167.3 167.9 1705872 2872.36 -0.71

03/29/10 167.9 170.9 171.8 166.7 168.4 2061103 3478.94 0.3

03/30/10 168.4 168.5 169.9 166 166.55 1795658 3014.63 -1.1

03/31/10 166.55 167 173.95 164.7 169.95 4750005 8008.28 2.04


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Related news

Reliance Communications now has 100 mn subscribers2010-03-15 15:10:00R eliance Communications, a telecom major in the Anil Ambani group, Friday announced amajor milestone with a subscriber base of 100 million for its wireless services with the target of doubling the number over the next three years. With this, the company has become the fourth-largest operator in the world, serving 100 million customers in a single country.

As part of its expansion strategy, the telecom major plans to take its broadband network withspeeds of up to 3.1 mbps beyond 60 cities within the next 100 days. The target will be 125cities.To commemorate the achievement, the company also announced plans of launching a slew of initiatives over the next 100 days, including a customized '100 Million Caller Tune' in 24,000towns and 600,000 villages across the country.

8 telecom companies bid for 3G, broadband wireless spectrumNew Delhi, March 18The Government has, so far, received applications from eight telecom companies to bid forthird generation (3G) and broadband wireless access (BWA) spectrum to be auctioned startingApril 8.All the top telecom players have submitted their applications, including Bharti Airtel, R elianceCommunication, Tata Communication, Tata Teleservices, Vodafone Essar, Etisalat DB andTikona. Qualcomm had submitted its application on Wednesday.Of the applicants, Bharti Airtel, R eliance Communications, Tata Teleservices and Etisalat DBhave expressed interest in bidding for 3G spectrum.

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R eliance Communications considers wireless to be the best option for rapidly increasingbroadband penetration in India. We will finalise our funding plans for the broadband business,including evaluating the option of a strategic investor, after the completion of auction.

Tata Telecommunications

Tata Teleservices Limited (TTSL) is a part of the Tata Group of companies based in NaviMumbai, an Indian conglomerate. It operates under the brand name Tata Indicom in varioustelecom circles of India. In Nov 2008, Japanese telecom giant NTT Docomo picked up a 26 percent equity stake in Tata Teleservices for about R s 13,070 crore ($2.7 billion) or an enterprisevalue of R s 50,269 crore ($10.38 billion).[1] In Feb 2008, TTSL announced that it would provideCDMA mobile services targeted towards the youth, in association with the Virgin Group on a

Franchisee model basis.

Tata Teleservices Provides mobile services under 3 Brand names:Tata Indicom (CDMA Mobile operator)Tata DoCoMo (GSM Mobile operator)Virgin Mobile (CDMA Mobile operator)Virgin Mobile (GSM Mobile operator

Tata Teleservices is part of the Tata Group. Tata Teleservices spearheads the Group s presencein the telecom sector. Incorporated in 1996, Tata Teleservices was the first to launch CDMA

mobile services in India with the Andhra Pradesh circle. Tata Teleservices offers multiple tariff plans in both the Post-paid and Pre-Paid category. It also offers Mobile Value Added Services tosubscribers.


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Stock price variation

DatePrevClose Open High Low Close

TotalTraded

QuantityTurnover

in Lacs%

change3/2/2010 23.25 23.5 23.8 23.1 23.75 1922806 451.31 2.150543/3/2010 23.75 23.75 24.1 23.75 23.85 1339214 320.44 0.421053/4/2010 23.85 23.85 24.25 23.75 24.05 2980506 717.3 0.838573/5/2010 24.05 24.25 24.85 24.1 24.45 2553059 626.3 1.66323/8/2010 24.45 24.7 25 24.45 24.5 1466989 362.35 0.20453/9/2010 24.5 24.5 24.6 23.8 23.9 1339458 322.84 -2.449

3/10/2010 23.9 23.9 24.2 23.7 23.8 1161647 277.82 -0.41843/11/2010 23.8 24.2 24.2 23.4 23.5 999565 237.29 -1.26053/12/2010 23.5 23.85 23.85 23.2 23.3 1362278 319.02 -0.8511

3/15/2010 23.3 23.3 23.65 23.1 23.2 1832602 428.33 -0.42923/16/2010 23.2 23.45 23.8 23.2 23.65 2424556 570.4 1.939663/17/2010 23.65 23.7 24.1 23.55 23.6 2357393 562.11 -0.21143/18/2010 23.6 24.5 25.8 24.1 24.65 8327956 2058.43 4.449153/19/2010 24.65 25 25 24.6 24.7 2635464 652.79 0.202843/22/2010 24.7 24.45 24.65 24.2 24.25 1962505 479.1 -1.82193/23/2010 24.25 24.35 24.55 23.85 23.9 1276070 307.44 -1.44333/25/2010 23.9 24 24.05 23.65 23.75 2834788 675.3 -0.62763/26/2010 23.75 24 24.45 23.85 23.9 1691129 407.36 0.631583/29/2010 23.9 24.45 24.45 23.65 23.7 1876747 446.79 -0.83683/30/2010 23.7 23.9 24.05 23.6 23.75 1741986 415.78 0.210973/31/2010 23.75 23.95 23.95 23.6 23.65 1127993 267.59 -0.4211

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Related News

Tata Docomo GSM services now in Himachal31 Mar 2010, 2050 hrs

Tata Teleservices launched its GSM services in Himachal Pradesh under the Tata Docomo brand,

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Company is offering per second tariff structure for every service.The company has connectivityin 286 towns and 4,342 villages in the state. Airtel, BSNL, Idea-Spice, Aircel, Vodafone and S. Telare the operators in Himachal Pradesh.

Tata Teleservices up 9 pc on BSE18 Mar 2010, 1041 hrs

Shares of Tata Teleservices on Thursday surged 9 per cent on the BSE, a day after it said it willsell its entire stake in tower arm--21st Century Infra Tele Ltd--to telecom infrastructure firmQUIPPO-WTTIL forR s 1,318 crore.

Helped by the positive news, Tata stocks shot up 9.12 per cent to a high of R s 25.70 in themorning trade on the Bombay Stock Exchange.

Similarly on the National Stock Exchange, the stock surged 9.32 per cent to a high of R s 25.80.A total of 36.11 lakh shares of Tata Teleservices (Maharashtra) changed hands on both thebourses in the early morning trade.

The company announced it had entered into a share purchase agreement with Quippo TelecomInfrastructure Ltd & Wireless TT Info Services Ltd for selling 100 per cent stake in tower arm --21st Century Infra Tele Ltd (TFCITL).As part of this deal, TFCITL's entire portfolio of 2,535 towers in Mumbai, Maharashtra and Goawill be acquired by QUIPPO-WTTIL at an enterprise value of R s 1,318 crore.

NIFTY Variations in the month of March


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Date Open High Low CloseSharesTraded

Turnover (Rs.Cr)

% Change

03/02/10 4935.6 5029.45 4935.35 5017 233127111 8468.18 -

03/03/10 5015.8 5093.25 5015.1 5088.1 191791765 7375.98 1.42

03/04/10 5096.95 5096.95 5049 5080.25 205104948 6826.25 -0.15

03/05/10 5080.55 5118.65 5068.05 5088.7 209604746 6307.8 0.17

03/08/10 5092.15 5147.1 5092.15 5124 187964711 7130.87 0.69

03/09/10 5121.05 5131.8 5094.35 5101.5 158734706 6364.07 -0.44

03/10/10 5101.6 5137.4 5092.05 5116.25 167174523 6445.89 0.29

03/11/10 5116.35 5152.6 5102.1 5133.4 155698046 5500.07 0.34

03/12/10 5131.8 5158.1 5122.1 5137 152561763 5927.11 0.07

03/15/10 5134.45 5151.05 5101.2 5128.9 134878673 5301.12 -0.16

03/16/10 5128.95 5209.25 5125.7 5198.1 120692486 5250.18 1.35

03/17/10 5198.45 5260.5 5177.15 5231.9 169767105 6291.05 0.65

03/18/10 5232.55 5255.65 5214.4 5245.9 160336720 5521.68 0.27

03/19/10 5246.8 5269.95 5237.1 5262.8 136871848 5558.7 0.32

03/22/10 5260.95 5260.95 5187.05 5205.2 130039411 5212.14 -1.09

03/23/10 5205.85 5243.6 5193.4 5225.3 146479804 5673.78 0.39

03/25/10 5225.3 5267.3 5202.95 5260.4 207844844 9239.93 0.67

03/26/10 5260.55 5293.75 5260.55 5282 140965576 6366.38 0.41

03/29/10 5283.9 5329.55 5242.15 5302.85 132186441 6001.64 0.39

03/30/10 5302.95 5325 5251.35 5262.45 133483766 5629.19 -0.76

03/31/10 5260.4 5293.9 5235.15 5249.1 147618695 6542.18 -0.25


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Comparative Analysis of Stock price % change of SelectedCompanies

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References:

Official Website:

Tata communication Official site: http ://www.tatacommunications.com/ (Accessed on 1 April,2010)R eliance Communication Official site: http://www.rcom.co.in/ (Accessed on 2 April, 2010)Mahanagar Telephone Nigam Ltd Official site: http://www.mtnl.net.in/ (Accessed on 2 April,2010)

Other Web portals:

1) http://finance.yahoo.com/q/hp?s=yhoo accessed on 1 st April at 12.15 p.m.2) http://www.moneycontrol.com/company-article/ntpc/news/NTP - accessed on 25th March

at 8.29 p.m.

3) http://economictimes.indiatimes.com/markets/ipos/articleshow/5538416.cms - accessedon 28th March at 7.48 p.m.

Documents

Project on Indian Capital Market