A social media post by billionaire businessman Elon Musk on Thursday gave a big blow to the telecom sector in the Indian stock market.
After Musk’s sharp remarks regarding Starlink, investors sold heavily in telecom stocks like Reliance Industries and Bharti Airtel. The biggest impact was on Reliance, whose shares fell by about 2.6%. Due to this one day fall, the market cap of the company decreased by about 5 billion dollars i.e. about 48 thousand crore rupees.
On Thursday, Nifty 50 closed down by about 384 points or 1.7%. Reliance’s stake in Nifty is about 9%, so the fall in its stock alone erased about 53 points from the index. Bharti Airtel shares also witnessed pressure, which had additional impact on the index.
Why did this happen?
In fact, a day ago, Elon Musk had posted on
Musk did not take the name of any company or businessman, but said that people can guess for themselves to whom he is pointing. After his statement, the debate regarding possible competition in India’s satellite broadband market intensified.
What did India say?
Musk’s comments come at a time when Starlink is preparing to launch its services in India. Starlink, Jio Satellite and Bharti-backed OneWeb have received licenses, but security clearance is still pending.
Meanwhile, the Telecom Ministry has rejected the allegations of discrimination. The ministry said that the questions being raised about the current regulatory framework are ‘baseless and based on misunderstanding’.
The market’s concern is not limited to Musk’s statement alone. Investors are also keeping an eye on how the arrival of satellite internet services will affect the business of telecom companies. Reliance Jio and Bharti Airtel together serve more than 80% of the country’s broadband customers, so increased competition may impact their growth and valuation.
Source: ndtv.in
