Vodafone Idea opted for the 4-year moratorium to clear Adjusted Gross Revenue or AGR dues, offered to telecom companies by the government as part of the Telecom Relief Package. Vodafone Idea will clear the AGR dues and spectrum payment over 4 years starting October 2021. This makes Vodafone the first Indian telco to accept the DOT 4-year moratorium. The declaration had to be given before 29-Oct. This moratorium is subject to the telco paying interest on the due amount during the moratorium period.
One of the positive fallouts of the spike in Brent to above $85/bbl is the sharp improvement in the Gross Refining Margin (GRM). The benchmark Singapore GRM has scaled to a 2-year high of $2/bbl. The average GRM for the current year stands at $3.2/bbl, which is nearly 4-fold higher than the previous year. GRMs have also been aided by a rebound in refining demand. These improved GRMs are expected to benefit the oil refiners with Reliance likely to be the biggest beneficiary apart from Indian Oil and BPCL in India.
One of the quickest to reach the Rs.1 trillion AUM mark has been Mirae AMC, India. It started operations in India in 2008 and has already crossed the Rs.1 trillion. What is more important is that Mirae is a pure fund-house and does not have any bancassurance backing, unlike other large AMCs in India. The second unique factor about Mirae’s growth story is that their AUM has been largely driven by accretion to equity assets and the growth purely on historic performance. It has 43.7 lakh folios and 15.4 lakh SIP investors.
There seems to be valuation concerns building up on India. UBS finds Indian markets unattractive due to extremely expensive valuations relative to ASEAN. It is underweight on India, Taiwan and Australia. UBS is overweight on Indonesia, Philippines, Singapore and recently upgraded China. In a related survey, Bank of America found fund managers most worried about stagflation in China. Fund managers identified inflation, China slowdown and COVID as the 3 most dominant risks. Short China was the big trade idea.
Morgan Stanley sees capex and productivity growth to be the two key drivers for the Indian Economy. It sees the capex/GDP ratio rising by 600 bps between FY21 and FY26. The boost to capex is likely to create a virtuous cycle of jobs, incomes and consumption growth. This would be supported by benign macro risks and Morgan Stanley almost expects a repeat of the 2003-2007 structural cycle. It expects GDP to compound at 7% between FY23 and FY26 earnings to compound at 20-25% over the next 4 fiscal years.
Dhani Services, the fintech outfit promoted by Sameer Gehlaut of Indiabulls, will raise Rs.1,200 crore from investors; including General Catalyst and Ribbit Capital. While General Catalyst will invest Rs.375 crore, Ribbit Capital and Sameer Gehlaut will also chip in with equal amounts. Dhani is a digital lending platform with over 30 lakh paid monthly subscriptions and over 90 lakh active users. Dhani became popular due to its One-Freedom card that provides instant credit to customers with a total bouquet of add-on benefits.
Fisdom, the digital wealth management outfit, announced the launch of stock broking services. Fisdom will offer the complete array of products including equity, F&O, IPOs, Buybacks, SGBs, NCDs, ETFs as well as currency trading. Apart from web-based and app-based trading, Fisdom will also offer a call-n-trade facility. It will offer a flat fee trade structure and an affordable subscription plan to attractive large traders. Most discount brokers don’t push the subscription model. Fisdom is extensively networked with banks.
Coal supplies to India’s power plants will be enhanced to 2.2 million tonnes per day (MTPA) to help fuel stocks reach 10 MT by Diwali. That will be a 33% increase in coal stocks from the current level. Coal fired thermal plants with capacity of 202 GW account for close to 70% of India’s power consumption and that was on the brink of cuts due to coal shortage. Hopefully, the worst is over. This boost will cover output from Coal India, Singareni Collieries and captive mines. Power plants consume 1.87 MT of coal each day.