Shares of Adani Enterprises (AEL) rose 2% to an intraday high of Rs 2,338.45 on the BSE on Monday following news reports that Adani Group plans to participate in a 5G auction. The stock is trading near an all-time high of Rs 2,420, touched on April 27, 2022.

However, shares of Vodafone Idea rose 6% to Rs 8.95 in intraday trading on BSE following the report. In comparison, state-owned Mahanagar Telephone Nigam Limited rose 13% to Rs 22.15, GTL and Indus Towers rose 8% (Rs 9.37) and 4% (Rs 217.85).

However, industry giant Bharti Airtel fell 5% to Rs 661.25. In contrast, the S&P BSE Sensex was down 0.44% at 54,244 at 10:11 am.

Meanwhile, Adani Group has no plans to venture into consumer mobility. Adani Group said we are one of many applicants participating in the open tender process as India prepares to launch the next generation of 5G services through this auction.

In a media statement, Adani Group said: “We are participating in a 5G spectrum auction to provide dedicated network solutions and enhanced cybersecurity for airports, ports and logistics, power generation, transmission, distribution and various manufacturing operations”.

AEL is the incubation arm of Adani Portfolio. AEL leads the decarbonisation of industry and mobility with Adani New Industries Limited. AEL’s other next-generation strategic business investments focus on airport management, roads, data centres and water infrastructure, areas with significant potential to unlock value.

According to Motilal Oswal Financial Services, 5G spectrum alone (3,500 MHz, 26 GHz) may not provide network coverage for its consumers, even if Adani Group plans to move into the mobile space. Pure 5G investment does not validate a mature telecom business.

“Other possibilities include the acquisition of passive networks of GTL and RCOM, as well as active network or spectrum agreements – intercompany roaming (ICR) arrangements with IDEA, or new network layouts. All of this could be a daunting task, the brokerage firm said. The acquisition of IDEA in its current form and form may also require a capital investment of more than Rs 2,500 billion,” the brokerage said.

In the competitive environment of the past 20 years, the idea of new entrants into the industry has unnerved investors about the next round of intense competition (continuous pricing improvements and market share gains) that could undermine current structural interests. With so many ifs and buts, the answer to Adani Group’s foray into telecommunications is not binary. The brokerage added that discussions about Bharti pricing and market share gains are likely to continue, but investors may react instinctively in the short term.