Business News at 10:00 am on 17th July, 2024

The department of telecommunications on Tuesday issued demand notices to telecom operators Airtel, Jio, and Vodafone Idea, asking them to pay for the spectrum purchased in the recently concluded auctions. The telecom operators have been given time till July 26 to make the payments either in 20 equal yearly instalments, or settle the amount in one go. Telcos can also make a part payment upfront, which can be a multiple of complete years with a minimum of two years. In the spectrum auction in June, the government sold 141 MHz spectrum worth Rs 11,340.8 crore. Going by the 10,523 MHz spectrum on sale, only 1.3% got sold. Bharti Airtel acquired the maximum airwaves, spending Rs 6,857 crore.
On to aviation sector. The Central government may usher in commercial charter operations of seaplanes in the country soon, by unveiling the guidelines for non-scheduled operator permits. Sources told FE that these new guidelines have been framed with industry’s inputs, and are in line with the new level of regulatory compliance for the segment. Many firms including SpiceJet, Mehair, and Heritage Aviation have shown interest in the segment, along with global OEMs, they added. Even global players such as De Havilland Aircraft and Cessna may show interest. Seaplanes imported for NSOP operations only attract less than 5% duty. Furthermore, many state governments, such as Maharashtra, Gujarat, and Andhra Pradesh, have shown interest in having this kind of connectivity.
Over to banking. The Reserve Bank of India’s recent circular mandating banks to send individual notices to the defaulter in cases of consortium lending may delay recovery process, say bankers. The circular, issued on Monday, says in case of consortium lending, all banks will be required to send separate show-cause notices to the borrower. Lenders argue that separate notices will likely have variations in language and content, potentially giving the defaulter grounds to approach the court, claiming inconsistency among the notices. Head of recovery of a public sector bank told FE that there can be some difference in the language and the content of notices because each bank starts its own proceeding after an account is declared fraud. This can create some legal complications later on.
Meanwhile, with the Supreme Court on Monday agreeing to hear Vodafone Idea’s curative petition for correction of alleged errors in adjusted gross revenue dues, analysts say a positive verdict could reduce the liability of the telecom operator by 50%. Similar relief is expected for Bharti Airtel. Collectively, such a ruling could lead to a benefit of over Rs 50,000 crore for the telecom operators, according to analysts. On Tuesday, shares of Vodafone Idea rose as much as 6% during the day before closing 0.7% higher at Rs 16.8 on the BSE. Shares of Airtel closed 2% higher at Rs 1,466. Brokerage house Citi in a note said the potential reduction in dues, if the curative petition is successful, could be Rs 30,000-35,000 crore
Moving on. Communications minister Jyotiraditya Scindia on Tuesday met Bharti Enterprises founder and chairman Sunil Bharti Mittal, Reliance Jio chairman Akash Ambani, and Vodafone Idea CEO Akshaya Moondra, and other top industry executives to discuss sectoral issues and the road map ahead. Based on the discussions, the department of telecommunications (DoT) will come up with an actionable plan to resolve the issues. It was Scindia’s first formal interaction with the top executives of the telecom operators. In the hour-long meeting, the minister broadly said that the focus of the government and industry should be on customers’ interest, according to officials. The telcos discussed strategies to enhance service delivery and address challenges they faced. Futuristic and innovative areas of growth were also discussed.
On to auto industry. With Bajaj Auto managing director Rajiv Bajaj saying it is time someone younger takes over the reins of the business, succession plans may be in the making at the two-wheeler manufacturer. Addressing shareholders at the company’s 17th annual general meeting on Tuesday in Pune, Bajaj said, quote, “Every time I say something to you (shareholders), I start by saying, ‘my mind goes back 30 years’. So, it tells me that perhaps I have been here long enough,” unquote. This is the first time in 17 years that leadership changes are being talked about at Bajaj Auto.
Lastly, the share market. The National Stock Exchange and the Bombay Stock Exchange, the two leading stock exchanges, will be today on account of Muharram. Wednesday’s trading hours are closed for the stock, equity derivative, SLB, currency derivatives, and interest rate derivatives segments, according to the BSE. Though trading on the stock markets is suspended, the current April–June quarter results for the fiscal year 2024–2025 will proceed according to schedule. During the day, twenty-two firms, including Asian Paints Ltd, LTIMindtree Ltd, Hathway Cable & Datacom Ltd, and Elecon Engineering Company Ltd, would announce their June quarter results.