OPINION, P6 NATION, P3 PALLAVA BAGLA India must take its role in the ITER project seriously INTERNATIONAL, P8 EDITORIAL CWC MEETING ‘NO CHOICE’ Govt big loser in spectrum case; if SC & govt see this, better telecom policies may come about Sonia to remain interim president; AICC to elect new chief in 4-6 months TikTok to launch legal action against Trump over ban NEW DELHI, TUESDAY, AUGUST 25, 2020 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL. XLVI NO. 151, 22 PAGES, `6.00 (PATNA `6.00, RAIPUR `7.00) P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 38799.08 ▲ 364.36 NIFTY: 11466.45 ▲ 94.85 NIKKEI 225: 22985.51 ▲ 65.21 HANG SENG: 25551.58 ▲ 437.74 `/$: 74.32 ▲ 0.53 `/€: 87.81 ▲ 0.64 BRENT: $44.68 ▲ $0.33 GOLD: `52356.00 ▲ `516.00 Axis Bank to acquire 17% stake in Max Life Axis Bank, the country’s third largest private sector bank, on Monday announced that it would acquire 17% stake in Max Life, reports fe Bureau in Mumbai. Axis Bank in a regulatory filing stated that the bank proposed to acquire 17.002% of the equity share capital of Max Life. ● SURVEY ‘Average pay hikes fall sharply’ SHUBHRATANDON Mumbai, August 24 AVERAGE INCREMENTS IN India have fallen to decadal lows, from 8.6% in 2019 to just 3.6% in 2020, a survey done by Deloitte Touche Tohmatsu India LLP shows. Only four in every 10 companies have hiked salaries, about a third have abstained while 27% are undecided. Even high-flying spaces like e-commerce and digital, known for double-digit increments, have struggled to keep up with tradition. Continued on Page 2 2020 increment decision (% of companies) 33 27 40 No increments Undecided Positive increments 2019 average increments 2020 average increments 8.6% (excluding zeros) Only companies giving positive increments 7.5% 2020 average increments (including zeros) Companies giving positive and no increments 3.6% Source: Deloitte All companies included (Capacity, in MW) 23,600 Awarded Commissioned Currently without buyer PPAs terminated 2,200 6,760 1,665 2.5 2.36 2.71 Lowest solar tariffs in SECI auctions `/unit) 2.53 INDIA’S overall unemployment rate fell to 7.46% for the week ended August 23 from the nine-week high of 9.1% recorded a week ago, driven by a fall in the rate in rural India, reports fe Bureau in New Delhi. According to CMIE, rural unemployment rate fell to 6.32% for the week ended August 23. INDIA’S SOLAR POWER story has been largely creditable, with a rapid pace of capacity addition and competitive tariffs being discovered, but several adversities including reluctance of discoms to sign power supply agreements (PSAs) are threatening to disrupt it. Nearlya third of the 23,600 megawatt (MW) renewable powerprojects,won byvarious players after quoting the lowest rates in reverse auctions conducted by the Solar Energy Corporation of India (SECI) for inter-state transmission system (ISTS), are staring at an uncertain future as the agency has not yet found buyers for electricity from these solar/wind power generation units. Most of these are underconstruction units; only2,200 MW of the awarded capacity has been commissioned till date. Project developers also grapple with other issues such as unavailability of land and SECI ISTS solar & wind auctions 2.65 ANUPAM CHATTERJEE New Delhi, August 24 Sun down 2.55 `36,000 crore of investments in jeopardy IN THE NEWS Unemployment rate decreases to 7.46% AGR CASE Over 8-GW solar units at stake 2.44 A RED initiative appears in today’s edition of Financial Express. These pages are an initiative of the marketing solutions team of The Indian Express Group and contain content paid for by advertisers. These pages should be read as an advertisement. LACK OF BUYERS Jul Feb Jun Aug Oct Feb May 2018 2019 2020 Lowest wind tariffs in SECI auctions (`/unit) 3.46 2.64 2.44 2.51 2.76 2.82 2.79 2.83 2.99 INDIA SWITZERLAND Feb May Jan Feb Sep Feb May Aug Aug 2017 2019 2020 2018 inadequate power transmission infrastructure, leading to inordinate delays. The investments involved in the stuck projectswith combined capacity of 8,000 mw is roughly `36,000 crore at `4.5 crore per MW. Continued on Page 2 TELCO TROUBLE EARNING $2 FOR 16 GB of data is a “tragedy” and not sustainable, Bharti Airtel chairman Sunil Mittal asserted on Monday.Reiterating the need for mobile tariffs to rise, Mittal said Airtel expects its average revenue per user (Arpu) to cross the `200-250 mark in the next five-six months. In Q1FY21,Airtel reported an Arpu of `157, the highest in the industry. Speaking on a leading television channel, Mittal observed that while telecom operators in India don’t want to earn $50-60 from a customer,as is the case in the US, Arpu nonetheless needs to rise to `300 for the business to be sustainable. Mittal called for a reset in the telecom space. Pointing out that the three operating telcos need to invest in 5G connectivity and roll out the network, the Airtel chief said DoT submits it can recover dues from Jio for RCom spectrum and Airtel for Aircel & Videocon; says it is computing dues FE BUREAU New Delhi, August 24 IN WHAT COULD put the resolution process of insolvent telecom operators like Reliance Communications and Aircel in jeopardy, the Supreme Court on Monday said that the government should move to cancel their licences and spectrum if their statutory dues (read adjusted gross revenue) are being wiped out. The apex court, which is examining whether the spectrum held by the operators can be monetised through the insolvency process, despite it being the property of the government,observed, “How can you sell somebody else’s property? This will allow for dues to be wiped out, new party will take over free of all encumbrances, lia- ■ AGR dues of RCom: `25,199.27 cr Future Retail averts dollar debt default It paid $14 million of interest on its 5.6% 2025 dollar notes ■ AGR dues ofAircel: SUVASHREE GHOSH, PR SANJAI & ANURAG JOSHI August 23 Jio acquired 47.50 MHz spectrum from Rcom in 800 Mhz in 2016 – could be made to pay around `13,000 crore of Rcom's AGR dues AMAZON.COM’S INDIA BRICK and mortar retail partner Future Retail paid interest on a dollar bond, averting one of the largeststumblesonsuch debt by an Indian company. Future Retail paid $14 million of interest on its 5.6% 2025 dollar notes, it said in an exchange filing Monday.It had missed the original July 22 deadline for the coupon payment,andwasina30-daygrace periodthatexpiredFriday.Failure to repay would have resultedindefaultandlethold- `12,389 cr Airtel acquired 160 MHz spectrum from in 2300 MHz fromAircel and 30 MHz in 1800 MHz fromVideocon in 2016 – could be made to pay around `2,000 crore ofAircel'sAGR dues DoTsaid that it is still calculating the dues arising out of trade by Jio andAirtel bilities.Wiping out of government dues in this fashion is not permissible. What is being proposed is like you renting out your house to a tenant,and the tenant selling your house under IBC. Spectrum if cancelled will have to be surrendered to department of telecommunications, which may be auctioned for higher realisation”. SC has reserved its order The SC has reserved the order in the matter.Earlier,on July 20 it had reserved the order in the matter relating to timeline in which operators like Bharti Airtel and Vodafone Idea are required to pay their AGR dues. The companies have sought a 15-20 year to pay the dues. Continued on Page 2 MITTAL-SPEAK ■ Bharti Airtel chairman Sunil Mittal called for a reset in the telecom space ■ He pointed out that the three operating telcos need to invest in 5G connectivity and roll out the network ■ Mittal said the sector could be down to just two players in the future, given the financial stress the sector could be down to just two players in the future, given the financial stress. “Unless the third operator puts in fresh capital, the survival of the operator is in doubt,” Mittal observed. Continued on Page 2 HDFC Bank bad loan ratio might widen to from 1.4% to 2%, which will be the closest to the highest since the global financial crisis Sashidhar Jagdishan, CEO-designate SOVEREIGN BONDS ON Thursday declined to the lowest since May after the Reserve Bank of India (RBI) sold debt at higher-thanexpected yields at Friday’s auction,Bloombergreported. Continued on Page 2 Prashant Bhushan refuses to apologise PRESS TRUST OF INDIA New Delhi, August 24 ACTIVIST-LAWYER PRASHANT Bhushan refused to offer an apology to the Supreme Court on Mondayfor his two tweets against the judiciary, saying what he expressed represented his bona fide belief which he continued to hold. Aninsincereapologywould amount to the contempt of his If I retract a statement that I believe to be true or offer an insincere apology, that would amount to the contempt of my conscience and of an institution that I hold in highest esteem conscience and of an institution,he said in his supplementary statement filed in the suo motu contempt case against him by the SC, taking note of advocate Anuj Saxena’s complaint. An apology for expression of beliefs, conditional or unconditional,would be insincere,he said. Continued on Page 2 RBI WINDOW PNB sees `40K cr of loan book getting recast FE BUREAU New Delhi, August 24 PUNJAB NATIONAL BANK (PNB) sees about 5-6% of its loan book (about `36,00043,000 crore) getting recast in FY21 under the central bank’s one-time asset restructuring window to soften the Covid19 blowto borrowers,its managing directorSS Mallikarjuna Rao said on Monday.A clearer picture, however, will emerge after the expert committee under KV Kamath prescribes WHAT PNB MD SAYS ■ Repayment moratorium shouldn't be extended beyond Aug 31 ■ PNB's credit growth will likely be about 4-6% in FY21 the contours of the recast scheme,he added. TheglobaladvancesofPNB, afterthe amalgamation of Oriental Bank of Commerce and United Bank with it, stood at ■ MSME and retail loans may grow at 8-10% in FY21, much higher than corporate loans ■ No plans yet to ask govt for more capital, will first raise from the markets `7,21,695 crore as of June 30. Addressing a virtual conference, Rao also said the credit growth of the country’s second-biggest lender will likelybe around 4-6% this fis- Future Retail had missed the original July 22 deadline for a coupon payment 30 It was in a 30-day grace period that expired on Friday Failure to repay would have resulted in default and would have allowed holders of the securities to demand immediate repayment on the $500 million of principal ers of the securities demand immediate repayment on the $500 million of principal. Continued on Page 2 Rising bond yields highest since May ● CONTEMPT CASE Data prices must rise: Airtel’s Mittal KIRAN RATHEE New Delhi, August 24 If dues not cleared, cancel licences: SC JUST IN TIME cal. However, loans to MSME and retail borrowers, which made up for 35% of the bank’s credit portfolio as of June, could grow at 8-10% in FY21, far exceeding the pace of rise in PNB’s corporate loan portfolio. Rao also said the repayment moratorium should not be extended beyond the August 31 deadline, as green shoots are emerging in the economy. Continued on Page 2 New Delhi 10-year bond yield Intra-day (%), August 24 6.180 6.160 6.140 6.102 6.165 6.120 6.100 6.080 Open Close
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