Shares in telecom services provider Bharti Airtel and Idea Cellular surged over 4 per cent each on Monday.
These stocks fell sharply on Friday on concerns that payment outgo towards spectrum purchase will increase their debt burden in the near future and will limit their ability to make additional investments.
However, Moody's has written in a note to clients that "We expect Bharti Airtel will fund the upfront payment of around Rs 7,800 crore as well as future payments from cash flow rather than additional debt."
The deferred payment for the new spectrum will come on the balance sheet of the company in a staged process, Moody's added.
Bharti Airtel will pay around Rs 29,100 crore towards renewal of spectrum in six circles and three additional circles, which were not due for renewal providing it with pan-India footprint for 3G services.
The Moody's also said that the telecom operators may go in for tariff hike in a phased manner which will help these companies to maintain their debt levels going ahead.
As of 12.13 p.m. shares in Bharti Airtel traded 3.56 per cent higher at Rs 389.90 apiece, outperforming the broader Nifty, which was up 0.75 per cent. Idea shares also traded higher by 4.24 per cent at Rs 179.60 apiece.
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