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Thursday,06-August-2020

Business

DoT to ask Vodafone Idea for payment this week

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Vodafone

With Airtel and Tata Teleservice having submitted their self assessment figures on AGR which though are subject to DoT reconciliation, the government will ask Vodafone Idea this week to apprise them of their numbers and submit the dues simultaneously.

The prospects of any major relief to the telcos before the Next Supreme Court hearing on March 17 is dim and official sources said they have to pay first as per their self assessment, as it’s not an overnight issue and they should have been prepared for it and provisioned.

“Airtel and Tata Teleservice have submitted as per their assessment and we will get back to them on their numbers but Vodafone has now to submit its assessment numbers so that we have time and numbers to consider for any relief even after the next hearing in the Supreme Court. But first pay,” a source said.

On Saturday, Airtel submitted Rs 8000 crore more as AGR dues, including Rs 5,000 crore extra, subject to DoT reconciliation. The telco had earlier paid Rs 10,000 cr as AGR dues. Airtel said Rs 18,000 crore is the full and final figure. However, DoT’s AGR figure stood at Rs 35,500 crore for Airtel. For Tata Tele which paid Rs 2197 crore, the figure stood at a little over Rs 14,000 crore.

Vodafone Idea so far has paid Rs 3500 crore, its figure as per government is Rs 53,000 crore and VIL is currently doing self assessment and is yet to give full and final figure as per its own calculations.

On Friday, Digital Communications Commission (DCC), the inter ministerial panel of Telecom Ministry could not take any decision on possible relief to the financially distressed telecom sector with officials saying more data are required for reconciliation of AGR numbers.

The DCC meeting that lasted two hours will be held again in the coming days. “No decision has been taken on any relief to the telecom companies, sources said, adding, the department needs more data, and that there will be more meetings and reconciliation of AGR figures.

Business

Headline inflation to remain at elevated level in Q2FY21: RBI Governor

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RBI-Governor-Shaktikanta-Das

Headline inflation is expected to remain at elevated level in Q2FY21, but is likely to ease during the second half of the current fiscal aided by a favourable base effect, RBI Governor Shaktikanta Das said on Thursday.

The Governor said the Monetary Policy Committee (MPC) was of the view that supply chain disruptions on account of the COVID-19 pandemic persists, with implications for both food and non-food prices.

“A more favourable food inflation outlook may emerge as the bumper rabi harvest eases prices of cereals, especially if open market sales and public distribution offtake are expanded on the back of significantly higher procurement. Nonetheless, upside risks to food prices remain,” Das said while delivering the decision of the MPC on monetary policy.

“The abatement of price pressure in key vegetables is delayed and remains contingent upon normalisation of supplies. Protein-based food items could also emerge as a pressure point.”

Consequent to the high retail inflation, the MPC decided to retain the RBI’s key short-term lending rates, but maintained its growth oriented accomodative stance.

Accordingly, the repo rate, or short-term lending rate for commercial banks, was retained at 4 per cent.

Like wise, the reverse repo rate stands unchanged at 3.35 per cent.

The MPC voted to maintain accommodative stance, thus opening up possibilities for more future rate cuts.

It was expected that the MPC might hold rates as recent data showed that retail inflation has been at an elevated level during June.

The retail or consumer price index (CPI) stood at 6.09 per cent in June.

The urban CPI stood at 5.91 per cent and rural at 6.20 per cent.

As per the data, retail inflation level has reached the upper limit of the medium-term CPI inflation target of 4 per cent.

The target is set within a band of +/- 2 per cent.

Besides, Das in his address pointed out that higher domestic taxes on petroleum products have resulted in elevated domestic pump prices and will impart broad-based cost push pressures going forward.

“Taking into consideration all these factors, the MPC expects headline inflation to remain elevated in Q2:2020-21, but likely to ease in H2:2020-21, aided by favourable base effects,” Das said.

“Given the uncertainty surrounding the inflation outlook and extremely weak state of the economy in the midst of an unprecedented shock from the ongoing pandemic, the MPC decided to keep the policy rate on hold, while remaining watchful for a durable reduction in inflation to use available space to support the revival of the economy.”

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Business

Covid Relief: RBI extends scheme for MSME debt restructuring

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Reserve Bank of India (RBI) logo.

The Reserve Bank of India on Thursday extended a scheme whereby stressed MSME borrowers will become eligible for restructuring their debt, provided their accounts with lenders were classified as ‘standard’ as on March 1, 2020.

Accordingly, the existing loans to MSMEs classified as ‘standard’ will be re-structured without a downgrade in the asset classification.

“A restructuring framework for MSMEs that were in default but ‘standard’ as on January 1, 2020 is already in place,” Das said while delivering the decision of the MPC on monetary policy.

“The scheme has provided relief to a large number of MSMEs. With COVID-19 continuing to disrupt normal functioning and cash flows, the stress in the MSME sector has got accentuated, warranting further support.”

According to the RBI Governor, this restructuring will have to be implemented by March 31, 2021.

The Reserve Bank placed eligibility conditions such as the limit of aggregate exposure, including non-fund based facilities, of banks and NBFCs to the borrower should not exceed Rs 25 crore as on March 1, 2020.

Besides, the borrowing entity is GST-registered on the date of implementation of the restructuring. However, this condition will not apply to MSMEs that are exempt from GST-registration.

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Business

Godrej Properties logs Rs 20 crore consolidated net loss in Q1

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Godrej. (Photo: twitter@GodrejGroup)

Godrej Properties on Wednesday reported a consolidated net loss of Rs 20.23 crore for the April-June quarter of FY 2020-21.

During the corresponding period of the last fiscal, the company had reported a consolidated net profit of Rs 89.87 crore.

The real estate major reported an 88.63 per cent fall in its revenues from operations during the first quarter of FY 2020-21 at Rs 72.29 crore.

In its investor presentation, the company said that due to the Covid-induced lockdown, there was very limited construction activity during the quarter and as a result, no new projects achieved revenue recognition. Cash collections, which depend on construction milestones, were also impacted, it added.

“This led to an accounting loss and negative operating cash flow for the quarter,” the company said.

Commenting on the performance, Pirojsha Godrej, Executive Chairman, Godrej Properties Ltd, said: “While we expect poor reported earnings and cash flows this financial year due to the lockdown and the major impact it has had on our annual construction plan, we expect strong momentum in both portfolio project additions and new project launches during the rest of the financial year.”

He added that that the current crisis will add further momentum to the process of consolidation that is underway in the sector and the company will continue to focus on rapidly growing its market share.

Shares of the company plunged nearly 3 per cent post the earnings announcement. Currently its shares on the BSE are trading at Rs 902.50, lower by Rs 28.70 or 3.08 per cent from its previous close.

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