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

Let’s begin with the top news. The government will be able to mop up a maximum of Rs 52,000 crore against spectrum worth Rs 96,000 crore to be put up for auctions in June, earnest money deposits submitted by the three telecom operators show. Reliance Jio’s deposit is the highest at Rs 3,000 crore. It is three times that of Bharti Airtel’s Rs 1,050 crore and 10 times higher than Vodafone Idea’s Rs 300 crore, taking the total to Rs 4,350 crore. EMD indicates the bidding intensity of the operators concerned and the amount of spectrum they intend to acquire. Going by it, Jio has the option to spend up to Rs 36,000 crore or 37.4% of the total value of the spectrum on sale.

Meanwhile, Kris Gopalakrishnan, co-founder of Infosys and president of the Infosys Science Foundation, told Financial Express in an interaction that predicting the recovery of discretionary spending in IT services is challenging due to the current global economic slowdown. He emphasised that IT services are closely tied to the global economy, making them susceptible to economic cycles and the further the integration of generative AI is transforming service offerings, complicating recovery forecasts. He said, quote, “When the global economy is going through a slowdown, the immediate reflection will be in the IT industry because that’s a true reflection of the global economy because the customers see a slowdown and hence this industry will see a slowdown,” unquote.

Over to market, The Centre has reduced the windfall tax levied in the form of Special Additional Excise Duty on domestically produced crude to Rs 5,700 per tonne from Rs 8,400 per tonne with effect from Thursday. As per the notification, the windfall tax, however, remains unchanged at nil for diesel and aviation fuel turbines. On May 1, the government reduced the windfall tax to Rs 8,400 a tonne from Rs 9,600. Windfall tax is reviewed every fortnight based on oil prices and fuel margins in the international market. An increase in windfall tax comes against the prospects of upstream oil companies such as Oil and Natural Gas Corp and Oil India.

Moving on. The Reserve Bank of India will conduct a 14-day Variable Rate Repo auction for a notified amount of Rs 1.25 trillion on Friday. A repo auction is conducted by the central bank to inject liquidity into the banking system. The RBI in a statement said, quote, “On a review of current and evolving liquidity conditions, it has been decided to conduct a Variable Rate Repo auction on May 17,” unquote. The auction will be held between 10:30 am and 11 am and reversal of funds will take place on May 31. The liquidity in the banking system is in deficit of around Rs 1.2 trillion, as per RBI’s latest data.

Next up, some news from the auto industry. Karthik Gupta, chief financial officer of Ola Mobility, has quit the company just seven months after joining the firm. An Ola spokesperson told FE that Gupta’s move is part of the ongoing restructuring exercise underway at the company. “This restructuring is aimed at productivity enhancement in an AI-led era that is redefining the cab-hailing industry globally,” said the spokesperson. Gupta’s exit also comes amid a series of high-level departures at the IPO-bound firm, including the resignation of Ola Cabs’ CEO Hemant Bakshi just four months into his tenure. As part of the restructuring efforts, Ola has onboarded co-founder Bhavish Aggarwal’s brother, Ankush Aggarwal, into the ride-hailing business as a member of the CXO team.

Over to technology. The government is planning to block not just pesky calls but also unsolicited messages via SMSes and social media platforms such as WhatsApp hard-selling any product or services. According to new regulations in the works, a fresh algorithm is being written to run a check on phone numbers and messages to see if these are being used for marketing purposes. As per the current norms, promotional messages need to be sent via headers and not numbers. Through the ‘do not disturb’ registry, consumers can block these.

Lastly, stocks in focus today. These include Vodafone Idea, Vedanta, Biocon, Concor, JK Paper, Crompton Greaves, and PB Fintech among others. Vedanta announced its first interim dividend of Rs 11 per share for the financial year 2025. The record date for this dividend payout has been set for May 25, 2024. Vodafone Idea on the other hand reported a net loss of Rs 7,674.6 crore for the fourth quarter, compared to a net loss of Rs 6,419 crore in the same quarter of the previous year. The company’s revenue was Rs 10,606.8 crore, up from Rs 10,532 crore in the corresponding period of the preceding fiscal. Biocon reported a 56.77 per cent year-on-year decline in net profit, totaling Rs 135.5 crore for fourth quarter.