QBiz: Telecoms Post Record Losses; Moody’s Cuts Growth Forecast

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A Moody’s sign is displayed on 7 World Trade Center, the company’s corporate headquarters in New York. 
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1. Airtel, Vodafone Idea Post Record Losses in Q2

Vodafone Idea Ltd and Bharti Airtel Ltd have posted record losses in the September quarter, ravaged by an unfavourable Supreme Court verdict that upheld the government’s broader definition of revenue on which it calculates levies on telecom operators.

Vodafone Idea’s loss for the September quarter widened to ₹50,922 crore from ₹4,874 crore in the year earlier, as it set aside money to pay dues to the government following last month’s adverse court order. Vodafone Idea’s loss is roughly five times its consolidated revenue from operations, which fell to ₹10,844 crore in the September quarter from ₹11,270 crore in the year-ago period.

(Source: Livemint)

2. Moody’s Cuts Growth Forecast to 5.6%

Moody’s has slashed its growth forecast for India for this calendar year to 5.6% from 6.2% it estimated earlier, citing “widespread weakness in consumption demand”.

“India’s economic slowdown is lasting longer than previously expected,” the international rating agency said in its Global Macro Outlook 2020-21 on Thursday. Economic activity is likely to pick up in 2020 and 2021 to 6.6% and 6.7%, respectively, but the pace will remain slower than in 2018 when the country’s real GDP grew 7.4%, it said.

“India's economic growth has decelerated since mid-2018, with real GDP growth slipping from nearly 8% to 5% in the second quarter of 2019 and joblessness rising,” Moody’s said. Investment activity was muted well before that, but the ecodown is that consumption demand has cooled notably.”

(Source: The Economic Times)

3. ICICI Bank, Union Bank, UCO Bank Classify DHFL as NPA

Even as a debt resolution plan for troubled mortgage lender Dewan Housing Finance Corporation Ltd. is being contemplated, some commercial banks have already classified the account as ‘non-performing’ as repayment has been due for more than 90 days.

ICICI Bank, Union Bank of India and UCO Bank have classified the loan as ‘non-performing’ in the current quarter. Other lenders such as Bank of Maharashtra, Bank of India, Punjab National Bank, Canara Bank, Syndicate Bank and Indian Overseas Bank, which have classified the loan in the special mention account (SMA)-2 at end September, may also tag it as a bad loan while finalising their accounts for the October-December period. If interest or principal is due for over 60 days, but for less than 90 days, the loan is categorised as SMA-2.

(Source: The Hindu)

4. PM Modi Calls for Early Opening of New Development Bank’s Regional Office in India

Prime Minister Narendra Modi on Thursday, 14 November, urged for the early opening of the New Development Bank’s regional office in India and offered full backing to the multilateral finance institution in promoting global growth. Addressing the Dialogue with BRICS Business Council and New Development Bank, Prime Minister Modi urged the BRICS Business Council to create a roadmap to achieve the USD 500 billion intra-BRICS trade target by the next summit.

“Identification of economic complementarities among us will be important in this effort,” he said.”I request that the work of establishing the regional office of the NDB in India should be completed soon. This will give a boost to projects in our priority areas,” Modi said as he offered full backing to the multilateral finance institution in promoting global growth.

(Source: Financial Express)

5. Parliament Likely to Exert Greater Scrutiny Over Functioning of RBI

The functioning of the Reserve Bank of India (RBI) is to soon come under greater scrutiny of Parliament.

The Standing Committee of Finance is proposing to examine the quality of supervision and oversight of financial institutions, inflation targeting guidelines and monetary transmission, and a performance appraisal of the banking system. All these issues intersect with RBI.

(Source: Livemint)

6. Private Equity Firms Want a Big Sip of Café Coffee Day

Private equity firms KKR, TPG Capital and Bain Capital have signed non-disclosure agreements (NDAs) with Coffee Day Enterprises (CDEL), initiating discussions on buying a significant stake in the group’s coffee business, three people familiar with the matter said. The PE firms are expected to begin due diligence shortly. The Dutch agro commodity, shipping and finance firm Louis Dreyfus Company BV is also expected to join the race but is yet to sign an NDA. KKR India CEO Sanjay Nayar stepped down from the board of CDEL on 11 November in view of the negotiations.

The board is expected to speed up talks with interested investors once the investigation report by former CBI official Ashok Kumar Malhotra is submitted. He’s looking into the letter that Café Coffee Day founder VG Siddhartha purportedly wrote to the board on 27 July, two days before he went missing.

(Source: The Economic Times)

7. Malvinder Singh, Former Fortis Healthcare Promoter, Arrested

The ED on Thursday, 14 November, arrested former Fortis Healthcare promoter Malvinder Singh and former CMD of Religare Enterprises Ltd Sunil Godhwani in a money-laundering case related to alleged misappropriation of funds of Religare Finvest Ltd (RFL).

The Enforcement Directorate (ED) took both the accused in its custody inside the Tihar central jail here, where they are currently lodged in a case filed by the Delhi Police in relation to the alleged scam, a lawyer associated with the case said.

(Source: Livemint)

8. Sachin Bansal Invests ₹ 888 CR More in His Venture Navi Tech

Flipkart co-founder Sachin Bansal has invested an additional ₹888.5 crore into his latest venture, BAC Acquisitions, recently renamed Navi Technologies, according to filings with the Ministry of Corporate Affairs.

According to the disclosure, Bansal has picked up 6.8 crore equity shares in the company, with each share priced at ₹130. Annapurna Mountain Range Bansal founded BAC Acquisitions in partnership with his IIT-Delhi batchmate Ankit Agarwal, soon after he sold his stake in Flipkart to Walmart last year for about $1 billion. The US retail giant bought 77% in Flipkart for $16 billion.

(Source: The Economic Times)

9. Adani Firm Plans ₹26,000 Crore Capex for the Next Five Years

At a time when corporates across the board are cutting down on their capital expenditure plans amid the slowdown, Adani Enterprises Limited (AEL), the flagship company of the Ahmedabad-based $13 billion Adani Group, has lined up a capital expenditure of ₹26,000 crore across its businesses in the next five years.

Jugeshinder Singh, Group CFO, Adani Group, told The Hindu, “We have a capex of ₹26,000 crore for the next five years and most of it will be towards airport development.”

“We are not cutting down on any capex plans. In fact, most of the capex for this fiscal has been exhausted and the remaining small capex of ₹1,800 crore will be done ahead of the end of this fiscal.”

(Source: The Hindu)

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