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Airtel, Vodafone Idea Share Price Falls As DoT Asks Them to Pay Up AGR Dues, Retail Inflation in India Touches 16-month High, WeWork Doubles Losses

Professor of Financial Economics and Part-time Value Investor, Transfin.
Nov 14, 2019 2:04 PM 5 min read

Airtel, Vodafone Idea share prices fall as DoT asks the operators to pay up their AGR dues. Retail inflation in India touches 16-month high of 4.62% in October. WeWork doubles losses to the tune of $1.25bn. Paytm should go public within five years, stipulates SoftBank ahead of latest funding round.





Tax department might impose 18% tax on CXO salaries.

Money Games: As per this report, some of the top companies headquartered in Pune, Mumbai and New Delhi have started receiving queries from the tax department on cross-charging. The tax department wants companies to proportionately distribute common costs from head office to branch offices and treat this as a supply. Once this is treated as a supply, 10% of it has to be added to the cost and 18% Goods and Services Tax (GST) could be levied on the total amount.


For instance, if the CEO of an organisation earns INR5cr per annum, the amount would be considered a cost for the head office where the executive is located. Now the tax department wants the organisation to cross-charge this cost proportionately to other branches and pay 18% GST on it. ET Policy


DoT asks operators to pay up their licence fee dues as per the SC AGR ruling.

No Escape: The Department of Telecommunications (DoT) has issued notices to all operators, including Internet Service Providers and Virtual Network Operators, asking them to do a self-assessment of their respective dues as per the recent Supreme Court ruling on the issue of Adjusted Gross Revenue (AGR) and pay up accordingly.  


Meanwhile, industry experts have opined that the DoT should have calculated the dues owed by various operators instead of asking the telecom companies to do a self-assessment.


The news comes a day after Vodafone Idea CEO said that unless the government eases off on some of the demands on mobile spectrum fees, the company risks liquidation. Hindu BusinessLine



Shares of Airtel, Vodafone Idea dip as DoT asks telcos to clear AGR dues.

Downhill: Shares of operators Airtel and Vodafone Idea today were down 3-15% as the Department of Telecommunications asked telecom operators to begin self-assessment of their respective dues as per the recent Supreme Court ruling on the issue of Adjusted Gross Revenue (AGR) and pay up accordingly. Livemint


On 24 October, the SC had directed operators to pay at least INR92,000cr in past dues to the government within three months. Bharti Airtel's dues are roughly around INR21,682cr, while Vodafone Idea has over INR28,309cr pending dues. Reliance Jio Infocomm’s dues stands at INR13cr. 


Airtel share price was down over 3% intraday today before closing at INR365.60 (-0.81%). Vodafone Idea share price plunged over 16% before closing at INR3 (-18.92%). Moneycontrol



Retail inflation in India touched a 16-month high of 4.62% in October.

Up and Grim: Retail inflation in India touched a 16-month high of 4.62% in October on the back of high vegetable prices vs 3.99% last month, as per data released by National Statistics Office.


This is the first month since August 2018 that retail inflation has breached the 4% medium-term target set by the RBI. Business Today


View India's inflation rate chart here

Moody's cuts India's GDP growth forecast to 5.6% for 2019-20.

Low and Grim: Moody's Investors Service on Thursday lowered its economic growth forecast for India to 5.6% in the current financial year, noting that the GDP slowdown in the country is lasting longer than previously expected.


The cut in growth forecast comes a week after Moody's changed its outlook on India's ratings to "negative" from "stable".


FYI: India's economy expanded at 5% in the first quarter of financial year, which marked the slowest pace of growth in more than six years. NDTV Profit


Has a blockbuster first day, sees 10 million sign-ups.



Has a blockbuster first day, sees 10 million sign-ups. 

Oh Right and the Seven Dwarves: Disney has stepped into a whole new world - of streaming. Disney+ was launched earlier this week, and the production behemoth has reported numbers that are impressive, to say the least.


Within the first day of its international launch, Disney+ reportedly added a whopping 10mn customers. The platform is offering a seven-day free trial, so not all those signed up can be expected to remain as subscribers post-trial period. Nevertheless, 10mn (in 24 hours) is a strong number. CNBC

To compare the numbers with those of Disney's rivals in the streaming industry, here's some of the other major platforms and their number of subscribers:

  • Netflix - 158mn
  • Hulu - 28.5mn
  • HBO - 34mn
  • CBS - 8mn
  • ESPN+ - 3.5mn

Hotstar will bring Disney+'s catalogue to Indian customers next year.

FYI: Disney plans to launch its streaming service in India (and some Southeast Asian markets) sometime in the second half of 2020. Disney+'s catalogue will be brought to customers via Hotstar, which Disney owns. TechCrunch



WeWork doubles losses to the tune of $1.25bn.

Backing Up: SoftBank-backed office-space startup WeWork doubled its losses to $1.25bn in the three months ended September vs a loss of $497mn reported in the same quarter in the previous year.


The company reported revenue of $934mn for the quarter, up from $482mn a year earlier.


Last month, SoftBank took majority ownership (80%) of WeWork as part of a deal to pump $5bn into the company. It also accelerated a $1.5bn equity investment originally due next year. CNN Business

Paytm should go public within five years, stipulates SoftBank ahead of latest funding round.

But Conditions Apply: As per sources, SoftBank has agreed to invest in Paytm's latest $1bn funding round on the condition that the payments platform should aim to go public within the next five years from the time of completion of the transaction.


The $1bn funding round is likely to see US asset manager T Rowe Price invest around $150-200mn in One97, with existing backers SoftBank and Alibaba Group affiliate Ant Financial infusing the rest. ET Tech


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