Weekly Wrap: Vodafone Idea’s Record Intra-Day Drop, RIL’s Q3 Miss, Bezos’ Rocky India Trip
Here’s what happened in the business world and across the globe between Jan. 14 and Jan. 17...
The nation’s most valued company’s operating profit missed estimates in the quarter ended December. Vodafone Idea Ltd. recorded its biggest ever intra-day fall. And world’s richest man commits additional $1 billion to bring more Indian small businesses online.
Here’s what happened in the business world and across the globe between Jan. 14 and Jan. 17...
Vodafone Idea’s Biggest Intra-Day Fall
Shares of Vodafone Idea pared some of the losses after a record 39.2 percent intra-day plunge on Friday as a possibility of relief regarding additional gross revenue emerged. The stock closed 25.2 percent lower at Rs 4.51 apiece.
- India is open to hearing wireless carriers’ suggestions to help ease payment of thousands of crores in overdue fees, Bloomberg News reported citing an official it did not name.
- Stripping out interest from the dues or paying the amount in tranches are some ideas that the government can discuss, the official said, asking not to be identified citing rules. An independent panel can examine such requests, provided the companies commit to pay some amount immediately.
- On Thursday, the Supreme Court dismissed petitions of telecom operators seeking review of the definition of adjusted gross revenue.
- Vodafone Idea owes an estimated Rs 44,150 crore in AGR dues to the government, of which Rs 8,400 crore is to be paid by Vodafone Plc. It has a total debt of Rs 1,17,300 crore on its balance sheet.
RIL’s Operating Profit Misses Estimates
Reliance Industries’ standalone quarterly profit missed estimates as refining margin fell unexpectedly and output from its petrochemicals business declined.
- Operating profit fell 5.8 percent sequentially to Rs 12,871 crore in the October-December period. That compares with the Rs 14,608-crore estimate.
- Operating margin narrowed 80 basis points to 14.9 percent.
- Net profit fell 1.2 percent over the preceding quarter to Rs 9,585 crore. That compares with the Rs 9,706-crore estimate.
- Revenue fell 1 percent to Rs 86,289 crore. That compares with the Rs 92,803-crore estimate.
- RIL’s gross refining margin fell to $9.2 per barrel from $9.4 in the preceding quarter.
Aramco Deal Delay
- Besides, Reliance Industries said its deal with Saudi Aramco will not be done by March 31.
- In August, the company had announced its decision to sell a 20 percent stake in its refining and petrochemical businesses to Saudi Aramco for an enterprise value of $75 billion.
Jeff Bezos Commits $1 Billion More In India
- Jeff Bezos, who visited India as online retailers face a pushback, said Amazon.com Inc. will invest $1 billion in its second-largest market to bring more small businesses online and promised to eliminate single-use plastic from deliveries in the country by June.
- However, the country’s antitrust regulator initiated a formal investigation hours before Bezos’ arrival, while infuriated small store owners demonstrated.
- A day later, India’s Commerce Minister Piyush Goyal said the retail giant was not doing a “favour to India when they invest that billion dollars”.
Should Jeff Bezos Worry About India?
How Indian Markets Fared
The Sensex crossed a new milestone this week but failed to hold on to it.
The 30-stock benchmark index, which crossed 42,000 for the first time, ended the week at 41,945.37, a gain of 0.8 percent. The NSE Nifty 50 rose 0.78 percent this week to end at 12,352.35.
Seven of the 11 sectoral gauges compiled by the National Stock Exchange gained this week, led by the Nifty Media Index’s 5.6 percent jump. The Nifty Private Bank Index was the top loser, down 1.6 percent.
The broader market represented by the NSE Nifty 500 Index rose 1.4 percent this week, led by the rally in Indostar Capital Finance Ltd., TV18 Broadcast Ltd. and Birla Corp Ltd.
How Rupee Fared
The Indian rupee resumed its decline after a blip last week. The domestic currency depreciated 0.2 percent against the dollar this week to 71.08.
Big Talking Points This Week
- CPI Inflation surged above Monetary Policy Committee’s tolerance level.
- Michael Patra appointed RBI deputy governor for three years.
- Wholesale inflation jumped to a seven-month high in December.
- Foreign investors turned buyers of Indian IT stocks first time in nine months.
- India’s trade gap narrowed more than estimated in December
- Consumer credit growth declined for the sixth straight quarter: TransUnion CIBIL
- RBI announced fourth round of operation twist.
- U.S. and China signed phase one of trade deal.