The telecom sector registered a rise of 23.6 percent in market value for the third consecutive month in January 2020, touching Rs 29,148 crore as against Rs 23,588 crore in December 2019, an IDBI Capital report stated.

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On a year-on-year basis, the rise was over 140 percent. In January 2019, the market value of the sector was at Rs 12,121 crore, the report added. In December as well, the market value of the sector rose 17 percent QoQ to Rs 23,575 crore, from Rs 22,518 crore in November.

Motilal Oswal also noted that the telecom weight increased for the third successive month up 40 basis point to hit an all-time high of 2.4 percent. The report also said Bharti Airtel saw a maximum increase in value at Rs 5,630 crore.

The rise in market value for the sector came despite the overhang of AGR dues. The SC order of October 24 last year had asked companies to deposit the amount in three months (by January 23). The telcos later filed a review petition on the order, which rejected the telcos' definition of AGR and exposed them to payments of up to Rs 1.33 lakh crore, but it was later dismissed by the court on January 17.

The DoT and the telecom companies were slammed by the Supreme Court on February 14 over delay in payment of AGR dues. The Supreme Court also directed for contempt proceedings to be launched against telecom companies for violating its order.

Mutual funds are bullish on the telecom sector, despite the Supreme Court slamming the companies, on increasing demand for voice and data usage in the country, industry experts said.

While the sector was in the red given regulatory and competitive pressures in the past, experts believe the rise in tariffs will offer some relief to companies.

Meanwhile, on an overall basis, domestic mutual funds turned out to be a net equity seller for January 2020. In January, mutual funds were a net buyer in equities for 12 trading sessions and net seller in the remaining 10 sessions, the IDBI Capital report stated.

It added that the net buying in equities was the highest at Rs 927.03 crore on January 8, 2020, while the highest net selling was recorded at Rs 4,215 crore on January 30, 2020.

Apart from telecom, MFs also showed interest in cement, chemicals, capital goods, healthcare, consumer, NBFC, technology and retail, which witnessed an increase in value as well as weightage.

However, oil and gas weight, which rose for six consecutive months, touched a seven-month low of 7.3 percent. As a result, the sector slipped to the fifth position in sector allocation of MFs (it ranked third in December 2019), the Motilal Oswal report said.