Transfin.

Reliance Jio Seeks Government's Permission to Undertake 5G Trials in India Based on Self-Designed Technology

Reliance Jio seeks Government's permission to undertake 5G trials in India based on self-designed technology. Airtel's self-assessment of AGR dues show a vastly lower number. SBI Cards and Payment Services subscribed 39% on first day of bidding. Manufacturing PMI declines in February. Auto sales remain weak.

 

 

 

SLOWDOWN

Manufacturing PMI declines in February.

Slight Slide

India’s factory output slowed slightly in February from the previous month’s eight-year high. This was caused by a modest weakening in demand and output, although overall conditions remained firm as per the Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit.

 

The Index fell to 54.5 in February, down from January’s 55.3. It stayed above the 50-point demarcation that separates growth from contraction.

 

Domestic demand, the survey showed, remained above the long-term average while foreign demand was weaker on account of the coronavirus outbreak in China. [BS]

 

Auto sales remain weak. 

The Never-Ending Slowdown

The auto industry continues to reel under a slowdown in demand as passenger vehicle sales declined in February. Maruti Suzuki India reported a 1.1% decline in sales, Mahindra and Mahindra reported a 42% decline, Tata Motors reported a 34% decline and Eicher Motors reported a 29.2% decline in sales last month.

 

This comes at a time when the auto industry races towards BS-VI transition as the new fiscal year starts on April 1st. [Moneycontrol]

 

SBI CARDS IPO

Subscribed 39% on first day of bidding. Why timing may be an issue for the IPO.

State Thanks of India

The initial public offering (IPO) of SBI Cards and Payment Services, an SBI subsidiary, was subscribed almost 39% on March 2nd, which was the first day of bidding.

 

The issue received bids for 3,94,54,830 shares compared with the issue size of 10,02,79,411 shares, representing 38.87% of the issue.

 

While more details are awaited, as of this afternoon the portion set aside for retail investors has been subscribed 51.46% and that of employees has seen subscription of 80% and shareholders at 53.43%. The reserved portion of qualified institutional investors has subscribed 0.09%, while that of non-institutional investors 8.5%. [Moneycontrol]

 

Extra Crunch

What are the biggest strengths and risks of SBI Cards and Payment Services? Read this article for an insight into the same. [ET Markets]

 

Time is Money

The IPO of the credit card subsidiary of the country’s largest lender was always expected to be a success by analysts. But in recent days, concerns have been voiced over the timing. The SBI Cards IPO is hitting markets on the back of a 9% correction in the Nifty and investors are getting increasingly nervous over the implications of the coronavirus outbreak. There are also concerns over valuation and consequences of competition from alternative digital payment platforms.

 

What should have been a blockbuster listing, therefore, could well end up being a mellow one, depending on how the markets are positioned at the time of listing. [Livemint]

 

TELECOM

Jio seeks Government's permission to undertake 5G trials in India based on self-designed technology.

Leading the Pack

Reliance Jio has become the first Indian telecom company to seek the Government's permission to undertake 5G trials in India based on self-designed technology, joining global telecom service providers, Huawei, Ericsson and Nokia who are also eyeing this opportunity. 

 

As per reports, if the trials are successful, it will also end Jio's dependence on Samsung, which was earlier its sole equipment supplier for 4G technology. [Business Today]

 

Airtel's self-assessment of AGR dues show a vastly lower number.

Know What's Best for Yourself 

As per a self-assessment of adjusted gross revenue (AGR) dues, Bharti Airtel has pegged the total amount its owes the Government at ?13,000cr ($1,800m) and does not see them exceeding ?18,000cr ($2,493m). 

 

This is almost half the amount (?35,300cr ($4,889m)) demanded by the Government.

 

It is rather interesting to note here that the news comes shortly after Tata Teleservices said that it owed only a fraction (?2,197cr ($304m)) of the ?14,000cr ($1,939m) the Government is demanding. [Livemint]

 

FUTURE

India’s poor record of infrastructure management casts doubt on ambitious infrastructure plans.

To See the Future, Look to the Past

If capital allocations are anything to go by, infrastructure spending is a top priority for the Government. In Budget 2020, ?1,70,000cr ($23.46bn), which is 15% of the entire budget for capital allocations, was reserved for infrastructure development.

 

Zeal notwithstanding, completing these infrastructure projects will be a major challenge. According to data released by the Ministry of Statistics and Programme Implementation (MoSPI) in a report titled ‘Project Implementation Status Report of Central Sector Projects Costing ?150cr and Above’ and analysed by a Livemint report, project completion isn’t one of India’s strong suits.

 

“[According to the last six years’ data], time and cost overruns have become routine features and these problems are most acute in four sectors that account for a bulk of infrastructure projects in the country: road transport and highways, power, railways, and petroleum.” [Livemint]

 

16% of system-level corporate debt likely to default over three years, report says. 

Debt is a Time Bomb

According to a recent report by India Ratings & Research, at least ?10.52trn ($145.2bn) worth of corporate loans - around 16% of the system-level corporate debt - is likely to default over the next three years due to the prolonged slowdown in the economy. Further, around 25% of the vulnerable debt is likely to turn delinquent, resulting in additional ?2.54trn ($35.05bn) of debt. [BS]

 

GLOBAL

Oil climbs 3% on hopes of OPEC cut and stimulus.

Renewed Vigour

In their first gain after six sessions of losses, Brent crude and US West Texas Intermediate crude prices jumped by more than 3% today. This reverses an earlier fall to multi-year lows.

 

The renewed vigour rides on hopes of a deeper cut in output by OPEC and stimulus from Central Banks. Oil markets hope that these factors could offset damage to demand from the coronavirus outbreak. [Investing.com]

 

As consumers shift to streaming, AT&T launches new online TV service.  

The Times They are A-Changin’

AT&T, which is struggling to cope with its shrinking DirecTV satellite business, is launching a new internet-delivered TV service. The new service, named AT&T TV, will have most of the same channels offered on DirecTV, but it’ll come over the internet.

 

The world’s largest media and entertainment company in terms of revenue has been trying to adapt to the shift to streaming video, as subscribers to traditional cable and satellite TV services fall. [AP]

FIN.

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