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Vodafone Idea condition extremely precarious: Citi

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IDEA VODAFONE

New delhi, Feb 20 : Vodafone Idea’s situation remains extremely precarious given its net debt/EBITDA of 20 times, analyst firm Citi has said in a report.

The company has admitted that its ability to continue as a going concern remains at risk in the absence of relief on its over $6billion AGR liability. While some green shoots were visible in 3Q (+2 per cent qoq revenue growth, 4G sub adds accelerated, tariff hike benefits to be visible from 4Q), this could come to naught without any relief.

The company has, for now, announced that it intends to make a part-payment towards its dues shortly (quantum still being assessed), the report said.

The deleveraging depends on Relief on the company’s AGR liability, either in terms of quantum or in payment terms, further relief measures from the government which could reduce levies and improve the balance sheet and cash flows and better than expected execution on synergy extraction and better than expected pace of 4G subscriber additions.

The risks Vodaofne Idea currently faces are that the company being made to bear the entire AGR liability, depressed India mobile revenues resulting from competitive intensity worsening and increase in subscriber churn and lower than expected pace of 4G subscriber additions.

We struggle to see what the next recourse could be for VIL with most legal options appearing to be exhausted. While it may still be possible for the government to offer relief perhaps via some legislative/policy action if it so chooses, we are yet to see any such indication or willingness from the government. Given the heightened uncertainty, Potential market share gains on further industry consolidation could drive upsides for Airtel & RIL while further tenancy exits could create downside risks for Infratel (Neutral). We keep our estimates unchanged for the moment as the situation remains extremely fluid and uncertain.

The report said Airtel has begun clearing its dues following the strong and unforgiving stance that SC has adopted. Airtel has made a partial payment of $1.4billion of its $5billion dues and will pay the balance well before the next date of hearing on March 17 post self-assessment. Following its $3billion capital raise in Jan and $2+billion of cash on books as of Dec, this should not be a stretch for the company.

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Wall Street tumbles after US tops world in COVID-19 cases

A shocking number of Americans applied for jobless benefits last week due to the coronavirus outbreak.

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Wall Street

New York, March 28 : US stocks ended significantly lower amid the fast-growing spread of coronavirus in the country.

On Friday, the Dow Jones Industrial Average slumped 915.39 points, or 4.06 per cent, to 21,636.78. The S&P 500 decreased 88.60 points, or 3.37 per cent, to 2,541.47. The Nasdaq Composite Index shed 295.16 points, or 3.79 per cent, to 7,502.38, Xinhua news agency reported.

10 of the 11 primary S&P 500 sectors traded lower, with energy down 6.93 per cent, becoming the worst-performing group. Utilities climbed 0.53 per cent, the only gainer among the sectors.

The United States became the country with the most COVID-19 cases worldwide on Thursday afternoon US Eastern Time, according to Johns Hopkins University.

As of 2 p.m. Eastern Time on Friday (1800 GMT), there were 94,238 confirmed cases in the United States, with 1,438 deaths, data from the university’s Center for Systems Science and Engineering showed.

A shocking number of Americans applied for jobless benefits last week due to the coronavirus outbreak.

US initial jobless claims, a rough way to measure layoffs, were registered at 3,283,000 in the week ending March 21, an increase of 3,001,000 from the previous week’s revised level, the Department of Labor reported Thursday. The reading easily crushed the previous record rise of 695,000 in October 1982.

Following a Senate approval earlier this week, the US House of Representatives on Friday passed a US $2 trillion COVID-19 stimulus package by voice vote, sending it to President Donald Trump for signature.

The bill, aimed at cushioning the economy from COVID-19 ravages, will provide small businesses emergency loans, business tax breaks, expanded unemployment benefits, more than US $1,000 direct payments for working Americans, government aid for industries such as airlines and hotels, as well as more support for hospitals and state and local governments.

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Sensex up 1,100 points on RBI relief hopes

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Reserve Bank of India RBI

Mumbai, March 27 The Indian stock market witnessed a gap-up opening on Friday and the Sensex traded over 1,100 points higher of hopes of further relief by the Reserve Bank of India (RBI).

RBI Governor Shaktikanta Das is scheduled to address the media at 10 a.m. There are expectations that the central bank may announce an emergency rate cut apart from further liquidity measures.

At 9.33 a.m., it was trading at 31,050.05, higher by 1,103.28 or 3.68 per cent from 29,946.77 points.

It had opened at 30,747.81 and it had touched an intra-day high of 31,105.11 and a low of 30,679.04 points.

The Nifty50 on the National Stock Exchange was trading at 8,985.95, higher by 344.50 points or 3.99 per cent from its per cent.

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MTNL to Provide 1-month Free Access to Corporate Servers for Work From Home During Nation-wide Lockdown

Generally, MTNL charges Rs 2,000-Rs 2,500 per connection for accessing corporate servers located on its network.

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State-owned telecom firm MTNL on Thursday started offering free access to office server to its enterprise customers’ employees to support work from home during the lockdown.

The employees of MTNL’s corporate customers using its broadband connection will be able to avail this service free for one month, MTNL Chairman and Managing Director Sunil Kumar told PTI.

“Many organisations have their main server on MTNL MPLS Network. Employees of such organisations who have MTNL Broadband can be enabled with MTNL VPNoBB (Virtual Private Network Over Broadband). Through this, they can access their office servers. This will be a secure medium,” Kumar said.

He said this system will give them access to all service that their company offers in office to carry out their task.

“Using this, corporate employees can do all the works for which otherwise they have to come to office. It will be just extension of office up to their home. No access limitations. MTNL will be extending this facility for one month without any additional charge, just to enable smooth work from home,” he said.

Generally, MTNL charges Rs 2,000-Rs 2,500 per connection for accessing corporate servers located on its network.

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