QBiz: Relief for Vodafone Idea; TRAI Moots Merger Norms for Telcos

1. Relief for Vodafone Idea as Infratel-Indus Deal Gets Government Nod

The department of telecommunications (DoT) on Friday, 21 February, approved the merger of telecom tower companies Bharti Infratel and Indus Towers, giving a glimmer of hope to Vodafone Idea.

The DoT’s go-ahead pertaining to the foreign direct investment (FDI) enhancement was key for the merger of the two tower companies. This in turn will help Vodafone Idea divest its stake in the tower arm to raise funds.

“The final FDI enhancement approval required for Indus-Infratel merger has come. This is a big positive for Vodafone Idea," a person aware of the matter said, requesting anonymity.

(Source: Mint)

2. TRAI Moots Reforms in Merger Norms for Telecom Licences Spanning Marketshare Math, Approval Modalities

In a bid to reform norms for transfer and merger of telecom licences, Trai on Friday suggested that while both subscriber base and revenue are considered in determining marketshare for mobile and internet service providers, only revenue should be taken into account in marketshare calculation for other services like national and international long distance telephony.

The sector regulator also suggested that the one-year timeline currently allowed for transfer/merger of licences in different service areas after National Company Law Tribunal nod should exclude time spent by companies in pursuing any litigation on account of which the final approval of a merger is delayed.

(Source: PTI)

3. SBI Card to Pip JSW Steel, M&M in M-Cap After Listing

SBI Cards & Payment Services Ltd, backed by State Bank of India (SBI) and private equity (PE) firm Carlyle Group, is likely to beat some of the largest companies by market value to rank 44 among the top 50 companies by market capitalization after listing next month.

The credit card company will open its initial public offering (IPO) on 2 March. The IPO is likely to be priced at ₹750-755 per share and could raise over ₹10,000 crore, a banker directly aware of the matter said, requesting anonymity.

(Source: Mint)

4. Paytm Payments Bank Partners Ola, Uber to Issue Fastags to 1 Lakh Drivers

Paytm Payments Bank has entered a strategic partnership with ride-hailing companies, including Ola and Uber, to allow some 100,000 drivers convenient purchase and recharge of FASTags across the country.

To facilitate purchase and use Paytm FASTags, the payments firm has set up over 12 camps at Uber Green zones across all major cities, including Delhi-NCR, Bangalore, Chennai Kerala, Hyderabad, Kolkata, Guwahati, Pune, Ahmedabad, Mumbai, and Chandigarh.

Paytm is also working with Ola at Bangalore airport and other local locations including Indira Nagar, Devanahalli, and Electronic City transport hubs to fasten the adoption of electronic toll payments in India.

(Source: Livemint)

5. Flipkart Moves HC Against CCI Investigation Over Deep-Discounting, Preferential Listing of Sellers

Flipkart has filed a writ petition in the Karnataka High Court seeking a stay on the “operation, effect and implementation” of the Competition Commission of India’s (CCI) January order asking its director general to investigate Flipkart’s alleged business practice of deep-discounting, preferential listing of sellers and exclusive pacts.

Though the HC on February 14 had issued an interim stay order against the probe based on rival Amazon’s plea, procedure demanded that Flipkart also file a petition as it is a respondent and party in the matter.

Flipkart, in its February 18 petition, said there is more than a strong prima facie case that the impugned order is “ex facie illegal” and is liable to be set aside in as much as it “fails to meet the basic/essential jurisdictional prerequisites under section 26(1) of the Competition Act”. Section 26(1) of the Act establishes that there is a prima facie case for probing a matter.

(Source: Financial Express)

6. India Inc’s Return on Equity Plunges to 16-Year Low in FY19

India Inc’s return on equity (RoE) fell to 9.5% in FY19 – its lowest in 16 years – on the back of declining profitability and asset returns of companies. The ratio has more-than halved from the high of 22.9% seen in FY07, said Motilal Oswal, in a report. RoE shows how good a company is at generating returns from its investment. In India, sectors such as public sector banks (PSBs), metals, oil and gas as well as utilities contribute the most to the RoE of listed companies.

“ In the recent past, RoE has been largely impacted by high NPA provisioning/write offs made by PSBs, intensifying competition in the telecom sector and shrinking margins in the auto sector. However, excluding PSBs, telecom and auto, the ratio has shown signs of a recovery in recent years,” said Motilal Oswal. For FY19, sectors such as telecom, infrastructure and PSBs clocked negative RoE. Indian companies have been cyclical or have seen major ups and downs with respect to their RoE because of its dependency on companies which belong to the sectors that witness cyclical growth.

(Source: Financial Express)

7. DHFL Administrator Reviews Alleged Fake Account Entries

Apart from transaction audit being ordered to check fraud and ongoing investigations by investigative agencies, the current management of beleaguered mortgage financier Dewan Housing Finance Corporation (DHFL), under RBI-appointed administrator R Subramaniakumar, is separately reviewing allegedly fake customer account entries during the erstwhile management of the company, sources close to development told FE.

The Reserve Bank of India (RBI) superseded DHFL board on November 20 and appointed Subramaniakumar as administrator. Multiple accounting entries were initially recorded in certain customer accounts for receipts for which the cheques had not been deposited in the banks and these have been subsequently reversed, the source added. Such instances have now been constantly reviewed by the current management and plans to introduce the confirmation from operation to that effect forward, source further said.

(Source: Financial Express)

8. 2,900-Tonne Gold Mine Found in Sonbhadra, 4 Times That of India's Reserves

Gold reserves, estimated at more than 2,900 tonnes, have been found at Sonbhadra district of Uttar Pradesh with the state government now gearing up for auctioning the mines for extraction of the precious metal.

According to the Geological Survey of India (GSI) and UP geology and mining directorate reports, gold reserves totalling 2,944 tonnes have been found in the Sona Pahadi and Hardi blocks of the backward Sonbhadra district.

“A team of our officials and scientists is currently camping in the district to submit a report in this regard,” UP geology and mining joint director Jai Prakash told Business Standard on Wednesday. He added that a detailed report was expected by Monday.

(Source: Business Standard)

9. SEBI Probe Finds Violation of Listing and Disclosure Norms by Sun Pharma

The Securities and Exchange Board of India (SEBI) has found that Sun Pharmaceuticals had violated its listing and disclosure norms by not revealing the related-party transaction with Aditya Medisales (AML), an entity owned by the drugmaker’s promoters that distributed its formulation in India.

The probe, however, did not confirm the alleged misappropriation of funds to the tune of Rs 42,000 crore, said two people privy to the development.

According to them, the Sebi's investigation department in its findings has recommended adjudication proceedings against the pharma major under Section 15 of the Sebi Act, which entails financial penalty if found guilty.

(Source: Business Standard)

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