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Supreme Court order on AGR huge blow to Bharti, Vodafone-Idea: Kotak




The Supreme Court verdict allowing the Centre to recover Rs 92,641 crore in total adjusted gross revenue (AGR) from telecom operators in India is a massive blow to Bharti Airtel and Vodafone Idea Ltd, Kotak Securities has said.

It said that post the adverse SC order in the long-standing AGR case, Airtel and the combined entity of Vodafone Idea are liable to pay Rs 21,700 crore and Rs 28,300 crore, respectively. These liabilities pertain only to underpaid licence fee and associated penalty and interest.

Related demand on underpaid spectrum usage charges is also quite likely, which could be 60-70 per cent of the licence fee related demand, the brokerage house said in a report.

Stating that the judgment has far reaching implications, it said aggregate demand from 15 operators (10 of whom have exited the industry) stood at a hefty 92,641 crore.

“The amounts are material for both Bharti Airtel and Vodafone Idea and places the latter specifically in a very tricky spot, given the massive stress it is already under,” the report said.

Both Airtel and Vodafone Idea, in their respective press releases post the SC judgment, have appealed to the government to review the impact of the verdict on the industry and find ways to mitigate the financial burden on the sector.

“We wouldn’t be too hopeful of a material relief. Vodafone Idea has also indicated that it could look at filing a review application if there are any technical or procedural grounds to do so. Our understanding, on the basis of discussions with legal experts, is that the case for a review application to be accepted is quite weak,” the report said.

Assuming that no relief comes through, the outstanding liability of 28,300 crore (and another potential large demand for past SUC underpayment) would make the already-stressed situation even tougher for Vodafone Idea.

“The company may need to resort to another round of large equity raise to fund these payouts. However, this may not be easy, given that the amounts we are talking about are a multiple of the company’s current market capitalisation. Bharti’s balance sheet is relatively better and while the payouts will increase the leverage ratios, we believe the situation is far more manageable for Bharti,” the report said.

On October 24, the Supreme Court ruled in favour of the Department of Telecommunications (DOT) in a long-standing dispute on the definition of adjusted gross revenue (AGR).

Operators pay licence fee and spectrum usage charges (SUC) on AGR and the dispute pertained to inclusion/exclusion of receipts from non-licensed activities (items like treasury income, dividend, capital gains, scrap sales, forex income, etc.) and certain other items (bad debt recovery, trade/consumer discounts, rental income on infra sharing).

The SC ruled that the DOT’s claims on the definition of AGR as well as applicability of interest, penalty and interest on penalty are both valid and that the operators are liable to pay 100 per cent of the demand that DoT has raised.


TASMAC sold Rs 164 cr worth of liquor in just one day




The Tamil Nadu State Marketing Corporation (TASMAC) has sold liquor worth Rs 164 crore in the state in just one day.

All liquor outlets and bars opened in the state on Monday.

According to reports from the TASMAC, Madurai zone accounted for the maximum sales of Rs 49.54 crore followed by Chennai region with sales worth Rs 42.96 crore, Salem Rs 38.72 crore, and Trichy region accounting for the sale of Rs 33.65 crore worth of liquor.

However there was no sale in the Coimbatore region as the shops are closed in the area following the higher number of Covid-19 cases. Shops in Nilgiris, Erode, Salem, Tiruppur, Karur, Namakkal, Thanjavur, Tiruvavur, Nagapattinam, and Myladuthurai remain closed as the number of cases are high.

Of the 5,338 shops in Tamil Nadu, 2,900 reopened on Monday.

The founder president of Pattali Makkal Katchi(PMK), Dr S. Ramadoss has called upon the state government to rework its policy on liquor and to enforce a total prohibition in the state for the health of the people of the state. He has also said that the claims of Chief Minister Stalin that TASMAC shops were allowed to function following the brewing of illicit liquor in the state as well as to prevent smuggling of liquor from neighbouring states.

Ramadoss has in a statement said, “Stalin should work his way to enforce total prohibition in the state of Tamil Nadu for the sake of the health of the people of the state, both mental and physical.”

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Sensex, Nifty climb new record highs




The key Indian equity indices continued their record run on Tuesday.

The BSE Sensex touched a fresh high of 52,836.31 and the Nifty50 on the National Stock Exchange hit an all-time high of 15,889.60 points.

Healthy buying was witnessed in banking and realty stocks.

Around 9.40 a.m., Sensex was trading at 52,813.83, higher by 262.3 points or 0.50 per cent from its previous close of 52,551.53 points.

It opened at 52,751.83 and has touched an intra-day low of 52,671.29 points.

The Nifty50 on the National Stock Exchange was at 15,875.05, higher by 63.20 points or 0.4 per cent from its previous close.

The top gainers on the Sensex were Asian Paints, IndusInd Bank and Tata Steel, while the losers were Dr Reddy’s Laboratories, SBI, Titan Company and L&T.

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Fuel price hike paused: Petrol, diesel prices unchanged




The Oil marketing companies paused the hike in fuel prices on Tuesday providing respite to people already burdened with all time high petrol and diesel retail rates.

Accordingly, the price of petrol continues to remain at Rs 96.41 per litre and diesel at Rs 87.28 per litre in Delhi.

OMCs had raised the price of the two petroleum products on Monday to take retail levels at new highs across the country.

In the city of Mumbai, where petrol prices crossed Rs 100 mark for the first time ever on May 29, the fuel price reached new high of Rs 102.58 per litre on Monday. Diesel price also increased to reach Rs 94.70 a litre, the highest among metros. The price levels remain unchanged on Tuesday.

Across the country as well petrol and diesel price rise was paused on Tuesday but its retail prices varied depending on the level of local taxes in different states.

Petrol prices in three other metros apart from Mumbai has also already reached closer to Rs 100 per litre mark and OMC officials said that if international oil prices continue to firm up, this mark could also be breached in other places by month end.

With Tuesday’s price pause, fuel prices have now increased on 24 days and remained unchanged on 22 days since May 1. The 22 increases hasve taken the petrol prices up by Rs 6.01 per litre in Delhi. Similarly, diesel has increased by Rs 6.55 per litre in the national capital.

With global crude prices also rising on a pick up demand and depleting inventories of world’s largest fuel guzzler – the US, retail prices of fuel in India are expected to firm up further in coming days. The benchmark Brent crude is currently close to $74 on ICE or Intercontinental Exchange.

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