Government gets 36 percent stake in Vodafone Idea
The government is set to become the largest shareholder in Vodafone Idea at 35.8 percent stake after the beleaguered telecom company decided to convert its dues of about Rs 160 billion to stock as part of a rescue package. The government will play no role in its operations and may exit once the company stabilizes.
Why it’s important: The survival of Vodafone Idea will ensure that the Indian telecom sector does not become a duopoly of Reliance Jio and Bharti Airtel. The company’s decision will benefit lenders as the telecom firm’s liabilities will reduce and more funds will be available to service its massive debt.
Banks may post 36.3 percent rise in net profit in fiscal third quarter
India’s listed banks are likely to post a 36.3 percent annual rise in net profit at Rs 381.53 billion for the three months ended December. However, net profits may decline 2.2 percent from Rs 390.22 billion in the fiscal second quarter, according to estimates by a Bloomberg poll.
Why it’s important: Listed lenders have been helped by a lower provisioning burden for stressed loans. Bad loans declined in the second quarter, both in absolute and percentage terms and the trend is likely to sustain in the third quarter as well.
Tata replaces Vivo as the main sponsor for Indian Premier League
The Tata Group has taken over the title sponsorship of the Indian Premier League T20 cricket tournament for this year and the next from Vivo, the last two seasons of the league’s contract with the Chinese mobile phone maker.
Why it’s important: The Tata Group’s recent entry into several consumer-facing digital businesses may have played a part in the decision. The move would be a good platform to showcase the group’s many consumer brands, including the proposed launch of its app Tata Neu.
Crypto sector considers stricter guidelines for advertisements
No advertisements of cryptocurrencies will compare them with regulated assets or say they are a solution to all money problems. The ads would refrain from exaggerated claims, and add a disclaimer saying cryptocurrencies are subject to market risks, according to an initial list of dos and don’ts prepared by Indian cryptocurrency exchanges.
Why it’s important: Caught between massive selling in the market, and uncertain regulatory environment, India’s cryptocurrency industry is trying to make the best of a worsening situation so that it is seen more favorably by government policymakers and the Reserve Bank of India.
Restaurant owners face tough haul amid Covid-19 curbs
Most restaurants halted expansion plans due to covid uncertainty and are seeking relief to offset the drastically reduced business. There are fears that more staff will lose their jobs in a sector that provides employment to a large number of people.
Why it’s important: Restaurants across India are staring at delayed recovery as the third wave of the pandemic driven by the Omicron variant forces authorities to restrict dining. While big restaurant chains might weather the disruption, smaller players will find it hard to survive.
Telecom firms seek 90-95 percent reduction in base price of 5G spectrum
India’s top mobile operators — Reliance Jio, Bharti Airtel and Vodafone Idea — have asked the government to cut the base price for the 5G auction in the mid-band 3300-3670 by as much as 90-95 percent. The regulator had earlier recommended a price of Rs 4.92 billion per MHZ for all-Indian spectrum of this band. Telecom companies said the high price would make 5G services unviable.
Why it’s important: The Telecom Regulatory Authority of India is expected to issue its suggestions by March, after which they will have to be cleared by the cabinet of ministers for the auction process to start.
India’s divestment goal for 2022-23 may be higher than current financial year
The Union budget scheduled to be presented in Parliament on 1 February is likely to set a disinvestment target that will be slightly higher than the target of Rs 1.75 trillion in the fiscal year ending on March. A final call is yet to be taken.
Why it’s important: A lot will depend depends on the initial public offering of Life Insurance Corporation of India, which is expected to collect around Rs 1 trillion. The much-anticipated listing of LIC in 2022 would be the country’s biggest IPO.
Edtech firms draw up voluntary code of conduct
India’s biggest edtech startups — Byju’s, Unacademy, upGrad and Vedantu — have come together to adopt a self-regulatory code and will adhere to a common code of conduct. As many as 15 such companies have established the India EdTech Consortium, an autonomous body under the Internet and Mobile Association of India.
Why it’s important: The move by the group of 14 edtech firms comes at a time when the government has indicated it will regulate the fast-growing sector to ensure that it conducts business in a transparent manner, keeping customer interest in mind.
Paytm shares plummet to record low since listing
The share value of payments firm Paytm declined to an all-time low, trading down a further 2. 16 percent on Tuesday at Rs 1,132 after an almost 6 percent slide on Monday. It might slide further to around Rs 1,000 as the newly listed stock was trading at about 17 times estimated 2022-23 sales, analysts said.
Why it’s important: Paytm’s main payments business, which accounts for about 70 percent of its revenue, could be under threat if there are further regulatory changes. In another bad news for the company. Regulators have rejected its entry into the insurance sector.
Government mulls easing restrictions on some Chinese investments
The India government may relax the scrutiny on certain foreign direct investments after recent guidelines to avert risks of opportunistic takeovers created at roadblock amid a bloody border standoff with China. The proposal to ease rules could be approved next month.
Why it’s important: India is considering the relaxations as investment proposals worth around $ 6 billion are stuck due to new rules to regulate foreign direct investment. The restriction had made deal-making for investors more difficult. Relaxing them would expand the pool of foreign investors.
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