The broader markets outperformed the benchmark indices even as telecom shares rallied despite industry regulator announcing ceiling on tariffs on roaming.

At 2:45PM, the 30-share Sensex was down 42 points at 28,884 and the 50-share Nifty slipped 13 points at 8,766.

Telecom operators like Vodafone, Bharti Airtel, Reliance Communications, Idea Cellular are expected to gradually increase rates to recover Rs 1.1 lakh crore they bid for spectrum in the auction that concluded last week, Moody’s said today.

“This high cost is credit negative for the country’s telecom operators because it will increase their debt and costs and reduce their ability to fund future expansion,” said the global credit rating agency.

Idea Cellular has dipped 4.4% at Rs 172, falling nearly 8% from its intra-day high on the profit booking. The stock hit a fresh 52-week high of Rs 187 on the BSE in early morning trade.

In past one month, the stock had rallied 17% compared with 4.5% fall in the benchmark S&P BSE Sensex till yesterday.

Shares of Idea Cellular have moved higher by 6% to Rs 184, also its fresh 52-week high on the National Stock Exchange (NSE), in an otherwise weak market.

In past two-trading sessions, the stock 8% after the telecom services provider announced the launch of its 3G services on 900 MHz spectrum band in Delhi circle. The CNX Nifty falls 2.3% during the same period.

EuroPacific Growth Fund today picked up over three crore shares of Idea Cellular for Rs 534 crore through an open market transaction.

As per data bulk deal data available with the stock exchanges, the fund has purchased a total of 30,157,849 shares of the telecom player.

Shares of Idea Cellular have moved higher by 7% to Rs 175, extending its past two days 10% rally on the National Stock Exchange (NSE), on back of heavy volumes.

The stock is just 2% away from its 52-week high of Rs 178 touched on September last year. It touched a record high of Rs 188 on November 2013.

Companies bidding for telecom spectrum and coal blocks might be in for a shock, as the Budget has proposed an enabling provision to allow service tax at 14 per cent on “all services” provided by the government to business entities.

“As of today, this will practically mean any service, including allocation of spectrum or mines, will attract service tax on the fee or royalty to be paid by companies,” says Sachin Menon, chief operating officer (tax), KPMG.

Shares of Idea Cellular and Yes Bank have gained up to 1% on the BSE after the National Stock Exchange included these stocks in its benchmark index Nifty. However, these two firms will replace DLF and Jindal Steel & Power in the 50-unit Nifty index which declined up to 1.5% on the BSE.

Mumbai: Idea Cellular Ltd and Yes Bank Ltd will replace DLF Ltd and Jindal Steel and Power Ltd in the benchmark Nifty index , according to a statement issued by India Index Services and Products Ltd, a subsidiary of the National Stock Exchange of India Ltd (NSE).

The changes made by the index maintenance sub-committee are part of its periodic review and will become effective from 27 March, it said. Apart from changes in the Nifty, revisions have been made in 21 other sectoral and theme-based indices of the exchange.

Idea Cellular, the country’s third largest mobile operator by revenue and subscribers, will need as much as Rs 15,000 crore to renew its existing spectrum in the upcoming auctions, which is expected to see cut-throat bidding among telcos.

The Mumbai-headquartered telecom major is most precariously positioned as far as number of licences are due for renewal and the contribution they make to overall subscriber and revenue base.

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