Increased competition, price war and uncertainty around its global acquisition plans seem to have lost confidence of large investors in Bharti Airtel.
Many schemes of top mutual fund houses that had a significant amount of their total corpus invested in Bharti Airtel has come down sharply over the past one year.
Bharti’s share in Birla Sunlife Long term Advantage equity scheme at 6.7 per cent in January 2009 has come down to 2.75 per cent at the end of January 2010.
“The shrinkage in Bharti’s share in the schemes is partly linked to the significant fall in its share price over the past one year. Fund houses have also reduced fresh allocation into the stock because of a weak outlook on the sector and the company,” said the head of a fund house on condition of anonymity.
Bharti Airtel’s share price fell from Rs 633 on January 31, 2009 to Rs 307 on January 29, 2010. It closed at 280 on Tuesday.
Experts suggest that the stock came under pressure at the time when the company was in talks for acquiring a stake in MTN but got further hammered after the sector entered the tariff regime of 1 paisa per second.
“While the outlook on the sector itself is not positive, fund houses are cautious on Bharti’s new acquisition, which does not look positive in the short-term,” said the head of a large fund house on conditions of anonymity.