In what could be the first tranche of payments against AGR charges DOT, Bharti Airtel has already disbursed Rs.10,000 crore. Against its total outstanding of Rs.53,000 crore, Vodafone will be paying Rs.2500 crore as the first tranche to the DOT while Tata Tele (which got merged into Bharti Airtel) will be paying Rs.2197 crore towards AGR charges. On 14 February, the Supreme Court had passed an order directing the telecom companies to immediately pay one tranche of the AGR dues and the balance before the next hearing on March 17th. DOT has also withdrawn its leniency circular.
As part of its media consolidation plans, Reliance plans to merge its media and distribution business under Network 18 umbrella. This will include the merger via scheme of arrangement between TV 18 Broadcast, Hathaway Cable & Datacom and DEN Networks will all merge into Network 18. The idea is to bring about greater synergy between content and distribution so as to create a media offering that is agnostic to the platform it is distributed across. RIL plans to leverage the content and distribution strengths to create the perfect ecosystem riding on its robust telecom and broadband networks.
The finance minister has confirmed that there was no spill over on the fiscal deficit front and that the targets were perfectly realistic. In the Union Budget 2020, the Finance Minister had confirmed that the fiscal deficit for FY20 would spill by 50 bps to 3.8% while the fiscal deficit for FY21 would also spill by 50 bps to 3.5%. This leeway was offered as per the recommendations of the NK Singh Commission. However, the Finance Ministry is a lot more confident after a favorable verdict in the telecom AGR case. If all AGR charges are recovered in this fiscal, the actual fiscal deficit this year could be as low as 3.5%.
In its board meeting on 17th February, the SEBI decided to actually separate the function of advisory and marketing in the case of investment advisors. However, for the same of simplicity, the advisors are allowed to recommend and also execute mutual fund schemes provided they are restricted to Direct Plans only. In addition, SEBI has also suggested capping the fees paid to investment advisors to avoid any performance based incentives charged by such advisors. The SEBI had long been worried about the conflict of interest between selling and advising under the same banner to the clients.
After Templeton, UTI has joined the list of mutual funds side pocketing their exposure to Vodafone Idea. Most mutual fund AMCs have been sceptical of the prospects of Vodafone Idea after the huge AGR bill and the refusal of the promoters to infuse fresh capital. Without fresh capital infusion, the company has a very small chance of survival. Templeton had taken the lead of side pocketing the Vodafone exposure and now UTI has also followed suit. UTI holds Vodafone debt in its bond fund, credit risk fund, regular savings fund, dynamic fund as well as its medium term fund. The segregation was necessitated after CARE downgraded the debt paper of Vodafone Idea to below Investment Grade. UTI’s total exposure to Vodafone debt is Rs.186 crore and side pocketing will not allow traders to profit from the chaos.
If Trump can honourably follow “America First” policy, you cannot really blame India for adopting an “India First” economic policy. Piyush Goyal (Industry Minister) has asked tenders worth Rs.30,000 crore to be scrapped so that government can look for domestic manufacturing opportunities. This approach could be a big boost for the “Make in India” program. It was observed that quite often the tender procedures were designed to keep domestic producers out. This is being done under a special “Public Procurement (Preference to made in India) order, giving first preference to domestic companies.
