The benchmark stock indices have opened the day with considerable gains after two days of choppy trading.
RIL has witnessed the inflow of more investments into its retail arm with Silver Lake upping its stake.
Join us as we follow the top business news through the day.
Philippine peso at an inflection point
Tariffs still very low, pricing revival critical for telecom sector: Birla
Low tariffs continue to be a pain point for telecom firms.
PTI reports: “Telecom tariffs are “still very low” and pricing revival is critical for the long-term growth of the sector, Vodafone Idea Chairman Kumar Mangalam Birla said on Wednesday.
Addressing Vodafone Idea Ltd (VIL) shareholders at the company’s Annual General Meeting, Birla said the telecom industry had witnessed the first round of tariff hikes by all operators in December 2019.
“However, tariffs are still very low and therefore pricing revival is critical for the long-term growth of the sector,” he said.
The Average Revenue Per User (ARPUs) in the Indian market continue to remain the lowest in the world, while data consumption is among the highest globally.
“The verdict on the long-pending industry issue of Adjusted Gross Revenue or AGR also added to the financial woes of telecom operators… Efforts from the Government of India to soften the financial burden by recommending payment through instalments has now been upheld by the Supreme Court,” Birla said.
In a stock exchange filing, Vodafone Idea said multiple items – including resolutions seeking approval of borrowing powers of the company, alteration of Articles of Association, nod of issuance of securities of up to Rs 15,000 crore – as set out in its September 4 notice, were transacted at the AGM.
The results of the voting will be intimated separately, the filing said.
Earlier this month, the board of Vodafone Idea approved fund-raising plans of up to Rs 25,000 crore through a combination of equity and debt instruments, subject to shareholders’ nod.
The board’s move had come just days after Supreme Court directed telecom operators to pay 10 per cent of total Adjusted Gross Revenue-related dues this year, and rest of the payments in 10 instalments starting from next fiscal year.
The ambitious fund raising plans promise to throw a lifeline to cash-strapped Vodafone Idea, which has suffered massive losses, has been losing subscribers and ARPUs, and faces outstanding statutory dues of about Rs 50,000 crore.”
Bajaj Auto reports 10% jump in Sept sales at 4,41,306 units
Definite signs of greenshoots in the auto sector.
PTI reports: “Bajaj Auto on Thursday reported a 10 per cent increase in its total vehicle sales at 4,41,306 units in September.
The Pune-based automaker had sold a total of 4,02,035 vehicles in September 2019.
Total two-wheeler sales in September stood at 4,04,851 units as compared to 3,36,730 units in the same month of 2019, a jump of 20 per cent, Bajaj Auto said in a regulatory filing.
Total commercial vehicles sales, however, plunged 44 per cent in the previous month to 36,455 units as compared to 65,305 vehicles sold in September 2019, it said.
Total domestic sales went up by 6 per cent to 2,28,731 units as against 2,15,501 units in September 2019.
In September, Bajaj Auto’s exports went up by 14 per cent to 2,12,575 units compared with 1,86,534 units in September 2019.”
At Rs 40,072 crore, govt’s external financing jumps 5-times till Aug: Report
An interesting change in trend after the government decided to turn more open to foreign borrowings.
PTI reports: “External financing of the government has jumped nearly five times over the previous year’s figure at Rs 40,072 crore during the first five months of the current fiscal, according to an analysis of the fiscal deficit numbers by Care Ratings.
At Rs 40,072 crore, the external financing of government debt is a whopping 867 per cent of the budget estimate for the full year, the agency said.
This is around 5 per cent of the total borrowings as 95 per cent of deficit financing is met through domestic sources, mainly market borrowings, it added.
According to data released by the Controller General of Accounts earlier on Wednesday, fiscal deficit during April-August stood at 109.3 per cent of the annual target. This was 57 per cent higher than the corresponding period last year.
In absolute terms, fiscal deficit — which is the gap between expenditure and revenue — stood at Rs 8,70,347 crore.
The government had pegged fiscal deficit for 2020-21 at Rs 7.96 lakh crore or 3.5 per cent of the GDP in the budget in February.
Later, following the COVID-19 outbreak, the government had increased its market borrowing to Rs 12 lakh crore, which is also likely to overshoot and analysts peg fiscal deficit for the full year at over 9 per cent of GDP.
Despite the massive spike in fiscal deficit and market borrowing, capital expenditure has declined by 1.3 per cent during the reporting period.
In view of widening fiscal deficit, government has increased market borrowings to Rs 9.7 lakh crore, which is 141 per cent higher than the same period last year, as well as external financing, which is a little over five times than last year, Care Ratings said.
Total receipts, which are 16 per cent of budget estimate, have fallen by 39 per cent during April-August compared with the corresponding period last year.
Of this, revenue receipts, which are 18 per cent of the budget estimate, have declined by nearly 39 per cent, it said.
Disinvestment proceeds have been quite lackluster at a paltry Rs 28.74 crore as against the budgeted Rs 2.1 lakh crore.
Total expenditure has increased 6.2 per cent, led by increase in revenue expenditure, which accounted for 89 per cent of the expenditure and grew 7 per cent year-on-year.
Capital expenditure declined by 1.3 per cent from last year. Compared to budget estimates, only 33 per cent of the capex has been undertaken, lower than 40 per cent of budget estimate last year, it said.
Tax revenue declined by 29.7 per cent from Rs 4,04,580 crore to Rs 2,84,495 crore.
Of this, income tax fell 28.9 per cent from Rs 1,65,500 crore to Rs 1,17,738 crore, corporate tax plunged 41.8 per cent to Rs 64,715 crore from Rs 1,11,166 crore, custom duties declined 47.9 per cent to Rs 32,302 crore from Rs 62,031 crore, CGST fell 40.2 per cent to 1,25,308 crore and GST compensation cess declined 28.9 per cent to Rs 28,154 crore.
The only revenue head that grew was excise duties, which jumped 32 per cent from Rs 76,032 crore to Rs 1,00,398 crore.
Non-tax revenue fell to Rs 86,147 crore, down by 56.6 per cent or Rs 1,98,621 crore.
Even interest receipts declined by 18.9 per cent to Rs 4,070 crore and dividends and profits plunged 60.2 per cent to Rs 59,578 crore.
Total revenue receipts declined 38.6 per cent to Rs 3,70,642 crore from Rs 6,03,201 crore.”
Sensex rallies over 450 points in early trade, Nifty tops 11,350
A great start to the day for stocks after a couple of days of choppy trading.
PTI reports: “Equity benchmark Sensex rallied over 450 points in early trade on Thursday driven by gains in index-heavyweights HDFC duo, Reliance Industries and ICICI Bank amid positive cues from US equities.
The 30-share index was trading 466.26 points or 1.22 per cent higher at 38,534.19, and the NSE Nifty rose 128.45 points or 1.14 per cent to 11,376.
IndusInd Bank was the top gainer in the Sensex pack, surging around 4 per cent, followed by Bajaj Auto, Bajaj Finance, Axis Bank, SBI, Bajaj Finserv, ICICI Bank, HDFC twins and Reliance Industries.
On the other hand, ONCG, Titan and Nestle India were the laggards.
In the previous session, Sensex ended 94.71 points or 0.25 per cent higher at 38,067.93, while the broader NSE Nifty rose 25.15 points or 0.22 per cent to 11,247.55.
Exchange data showed that foreign institutional investors sold equities worth Rs 712.48 crore on a net basis on Wednesday.
According to traders, domestic equities opened on a strong note following positive cues from US equities amid thin trade in other Asian markets.
Bourses in Japan halted trading after the Tokyo Stock Exchange witnessed a technical glitch earlier in the day.
Exchanges in Shanghai, Hong Kong and Seoul were closed for holidays.
Wall Street indices ended on a positive note in the overnight session.
International oil benchmark Brent crude was trading 0.02 per cent lower at USD 42.29 per barrel.”
Reliance Retail to get ₹5,550 cr. investment
Reliance Industries Ltd. (RIL) and Reliance Retail Ventures Ltd. (RRVL) on Wednesday announced that co-investors of Silver Lake will invest an additional ₹1,875 crore into RRVL, a subsidiary of RIL.
This brings the aggregate investment by Silver Lake and its co-investors in RRVL to ₹9,375 crore, translating into a 2.13% equity stake in RRVL on a fully diluted basis.
This latest investment values Reliance Retail at a pre-money equity value of ₹4.29 lakh crore.
Earlier on Wednesday, General Atlantic, a leading global growth equity firm, said it has decided to invest ₹3,675 crore into RRVL.This investment values Reliance Retail at a pre-money equity value of ₹4.285 lakh crore. General Atlantic’s investment will translate into a 0.84% equity stake in RRVL on a fully diluted basis