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Thursday, January 2, 2020

economic news of india - world economic news - economics news for students - indian economy news

economic news of india - world economic news - economics news for students - indian economy news


The single engine that India is running on stops sputtering

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KOLKATA | BENGALURU: Retailers and consumer goods companies said sales in the October-December festive quarter had been the best in past four years on account of 'pent-up demand', a buoyant stock market, wider availability of consumer credit at 0% interest, and the harsh winter in the North that triggered sales of heating products and winter wear.While industry executives said some 'green shoots' were visible, they added that they would observe sales over the next one-two quarters before announcing a revival in consumption."Some green shoots can be seen, but the upcoming summer will tell us whether the momentum is sustained," said Panasonic India CEO Manish Sharma.According to industry executives, sales of white goods grew 7-8% in October-December 2019 compared with a contraction of 2-4% during the same period in 2018 and 2017, and 3-4% growth in 2016. The only exception was TVs, which saw sales shrink 9-10% due to a shift in consumption habit to smartphones. Counterpoint Research, which tracks smartphone shipments, said last quarter of 2019 was the best for the category in four years.The October-December quarter is crucial for consumer-oriented companies, and accounts for 35-40% of their annual sales. The pace of sales growth during the last festive quarter is still less than the pre-demonetisation period, when companies used to widely report double-digit growth. Sales were severely impacted by demonetisation during the festive quarter of 2016, and by the implementation of GST in 2017, and industry executives believe the lingering effect of these two events dampened overall sentiment in 2018.But the likes of Reliance Retail, Lifestyle, Puma, LG, One-Plus, Panasonic, Vijay Sales and Great Eastern Retail said sales in the last quarter of 2019 grew beyond expectation, with good demand during Dussehra-Diwali in October and a pickup in December wiping out the slow sales in November.Puma India managing director Abhishek Ganguly said consumer spending had picked up in the festive quarter with buyers thronging malls and ecommerce marketplaces, and discounts coming down.LG Electronics India vice president Vijay Babu said the company registered 18% growth in the last quarter. "Due to good festive sellout, current channel inventory is quite low and we expect 30% growth in the current quarter," he said. LG is the largest white goods maker in India.Counterpoint Research associate director Tarun Pathak said preliminary data shows smartphones sales grew in double digits in the festive quarter. "Due to a good last quarter, smartphone sales growth in calendar year 2019 would be 9-10%, and we expect double-digit pace of growth in 2020," he said.Smartphone maker OnePlus India general manager Vikas Agarwal said any product targeting the youth, like smartphones, will do well in an aspirational country like India.India's GDP growth rate fell to 4.5% in the September quarter from 5% in April-June. This has been attributed to poor consumer spending, weak private investments and the impact of a global slowdown. International Monetary Fund has forecast India's economy will grow at 6.1% in 2019, but will pick up pace to expand at 7% in 2020.Reliance Retail's CEO of fashion and lifestyle business, Akhilesh Prasad, said there has been some recovery for the fashion retail industry in the October-December quarter. "If everything is so bad, why is the stock market rocketing? I don't think there is any real slowdown," he said, adding the retailer is targeting 70% growth in 2020.Electronics retailer Great Eastern Retail director Pulkit Baid said sales were sluggish in the July-September quarter but had bounced back in October-December due to pent-up demand and wider availability of consumer credit at 0% interest.Vijay Sales director Nilesh Gupta said the sales growth could be partially attributed to the harsh winter in the North, and said air purifiers and heating products were out of stock. "It has been an extraordinary quarter with sales growing at 12-13% compared with a decline during the same period in the previous three years," he said.

Banks start 2020 with a Rs 30,000-cr problem

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MUMBAI: Indian banks could be staring at bad-debt provisions of an estimated Rs 30,000 crore against loans to Dewan Housing Finance Corp (DHFL), the Anil Ambani-led Reliance Home Finance, KKR-backed Coffee Day Enterprises and CG Power. Resolution hasn't been finalised in any of these accounts, which means the December quarter could possibly see a reversal in the brief fall in provisioning that occurred in the preceding three-month period.The bulk of the provisions will be on account of DHFL, which entered the bankruptcy process in December.The Reserve Bank of India stipulates that once an account is referred to the National Company Law Tribunal (NCLT), a provision of 40% has to be made within the financial year. Provisions against nonperforming assets (NPAs) by the banking sector contracted about 11% to Rs 62,754 crore in the September quarter from Rs 70,458 crore in the year earlier. State-run banks recorded a contraction of 15.6% in their provisions at the end of the September quarter.While the financial system has an exposure of Rs 87,000 crore to the mortgage lender, most banks have only set aside 10-15% of their exposure. DHFL alone could pose a system-level provision burden of more than Rs 25,000 crore, which banks will have to absorb over the December and March quarters. Banks have an exposure of over Rs 5,000 crore to Reliance Home Finance, Rs 4,970 crore to Coffee Day Enterprises and more than Rs 4,000 crore to CG Power. Lenders are in the process of negotiating resolution plans in the latter three companies under the inter-creditor agreement (ICA) process."It's discretionary upon banks to take the provisioning hit but considering that most lenders have worked towards a higher provision coverage ratio regime, the markets would expect them to set aside more against these stressed accounts," said Yes Securities lead analyst Rajiv Mehta. 73077766 Another big account is Vodafone Idea Ltd where lenders will have to take a call on the safety net they want to create after the top management recently cautioned lenders that timely repayments may not be possible without urgent relief from the government if the telecom department decides to invoke bank guarantees to recover dues.Lead lender State Bank of India has an exposure of Rs 12,000 crore to Vodafone Idea. The company has a total debt of Rs 1.17 lakh crore. It has also got a severe blow following a Supreme Court ruling on adjusted gross revenue in October.SBI got Rs 12,160 crore following the acquisition of Essar Steel by an Arcelor Mittal-Nippon Steel consortium last month through the Insolvency and Bankruptcy Code (IBC) resolution process."Due to slow resolutions, the worry is that almost all the gain on the Essar account would be used to cover the provisioning loss in the December and March quarter," said a senior bank official on condition of anonymity. "We were hoping that the tide has turned but the March quarter especially looks very crucial for the sector."A recent RBI financial stability report had said that the Indian banking system was not yet out of the woods and that there was a likelihood of bad loans increasing as a percentage of advances after the first annual decline in eight years.

Swiggy wants more money for delivery

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Bengaluru: Swiggy is progressively raising its commissions from restaurants in regions where its service is nearing maturity, while aggressively pushing partners to advertise on its platform, as the company shifts focus to monetising its core food ordering business, restaurateurs and others with knowledge of the matter said.The Bengaluru-based company has also increased delivery fees it charges the customer, to control its losses on a per delivery level, the people told ET.This comes in at a time when the food delivery industry is moving towards consolidation with Zomato in talks to buy UberEats. In December, ET reported that Uber was likely to invest at least $100 million in Zomato in exchange for the latter buying out the firm's India food delivery operations.Swiggy chief executive Sriharsha Majety had claimed the company leadership in the food delivery market with a 60% share. ET could not independently verify this number."On streets where there is already a high density of restaurants, they (Swiggy) have started charging higher commission from new and even some existing restaurants," said a fast-food chain owner that lists exclusively on Swiggy. "In upcoming cities and areas where they don't have too many restaurants on their platform, they continue to charge lower fees."The move also ties in with the company's focus on getting restaurants to fund a larger chunk of promotions and explore other value added B2B services.The company typically engages restaurants on a 11-month contract and has been seen as increasing commissions when these contracts come up for renewal.It has raised its charges to 18-23% of the total order value, up from 12-18% it used to charge earlier, people told ET."This is nothing but business as usual in a marketplace such as ours," Swiggy said in a statement to ET, while denying any unusual increase in commissions for any specific restaurant partner base."Commissions at Swiggy are not based on the category or market maturity/geography. It is worked upon at an individual restaurant level and is in line with factors like average order value, delivery costs and other costs that are incurred," a Swiggy spokesperson said.Another person said the commissions Swiggy charged from restaurants in new regions were far higher than what it did when the company was growing its service in the major metros."There is an increased focus on monetisation, cutting burn rates, profitability, unit economics by companies across the consumer Internet space," said Ankur Pahwa, who leads EY India's ecommerce and consumer Internet practice. "Food tech companies have created an ecosystem from scratch in the past five years which has significantly benefited the suppliers these platform work with. An increased commission structure addresses the value they are creating." 73077747 Swiggy has already started charging restaurants on a pay-per-click model for ads they run on its platform, rather than a fixed fee like earlier, people in the know said. It has also made visible moves to improve monetisation in the past few months by increasing its delivery fee to ₹35 in select regions for orders below ₹98 and ₹25 for orders above that limit.Rival Zomato has more than halved its burn to under $20 million a month, from $45 million in March. Investors in Swiggy said the cash burn on its food delivery business continued to be about $30 million a month and that there was an intent to progressively get it down by the first quarter of 2020."The two companies have very different growth paths which will become clearer in the coming year. However, unit economics focus in the core food delivery business is very real in the overall sector," said an investor in the space.

Broadcasters miffed at TRAI’s new caps on channel pricing

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Mumbai: A day after India's broadcasting regulator announced new caps on pricing and bouquet discounts, Indian television stations have sought reversal of these changes that some broadcasters believe are "negative" for the entire value chain."The authorities have been talking about not micro-managing every part of the business, but that's what they are doing with these amendments," said a top executive at a large broadcast network. "They have failed to give any logic behind the price cap of Rs 12, or the capping bouquet discount at 33%."In the amended rules, announced after three-and-a-half months of consultation, the Telecom regulatory Authority of India (Trai) has reduced the cap on MRP of TV channels that are part of a bouquet by 37% to Rs 12 from Rs 19.The industry regulator has also brought back the analogue-era 'twin conditions', which limit broadcasters from offering more than 33% discounts on channel bouquets. Broadcasters have been asked to submit the revised rates of individual channels and bouquets on their websites by January 15.However, to voice their opposition, the top four broadcasters - Star, ZEE, Sony and Viacom18 - have withdrawn their existing reference interconnect offers (RIO) and rates, giving the mandatory 30-day notice.RIO is the contract between broadcasters and cable/ DTH networks, detailing matters relating to price and other service quality terms."The top four networks have agreed to withdraw their existing RIOs and send the 30-day notice," said the chief executive of a broadcasting network. "We are not acknowledging Trai's new amendments. The regulator may not like this but we are forced by it to take extreme steps."Zee Entertainment Enterprises (ZEE) has mentioned on its website that all previous versions of RIO and interconnection agreements of the company up to December 31, 2019, stand withdrawn."Any RIO or interconnection agreement(s) received by ZEE after close of business hours on December 31 shall be invalid," the broadcaster mentioned on its website.Similarly, Star India and Sony Pictures Networks India (SPN) have also said that existing packages are valid only until January 31. "The new regime is far more restrictive than the earlier one and appears to be negative for the broadcasters. Larger broadcasters with multiple driver channels could mitigate the impact by smart pricing of their bouquets or channels," said Rohit Dokania, senior VP at IDFC Securities.Some of the executives ET spoke with said that they might agree on removing most popular channels from bouquets and price them higher, at Rs 25 per month. "If things don't work out, we may take this decision collectively and allow the cable and DTH industry to keep those channels in their bouquets instead," said an executive.Executives told ET that the Trai move would not help consumers, the intended beneficiaries of the latest amendments."India is lowest ARPU TV market in the world. Why is Trai trying to control the price? More money is good for the entire sector as we will be able to invest in quality content. What Trai is talking about are rates of 2004-05. The cost of content alone has gone up 10 times since then," said one executive.

Tata power: may not be able to run mundra power project after February

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NEW DELHI: Tata Power will be forced to stop operating its imported coal-based Mundra ultra-mega power project after February unless its five consumer states allow pass-through of additional fuel cost to consumers, the company has told the Union power ministry.The ministry, in turn, told Gujarat, Haryana, Rajasthan, Punjab and Maharashtra, which buy power from the Rs 18,000-crore plant, to decide on the matter latest by January 15, or deal with power shortage without Centre's support, people aware of the development told ET.Tata Power managing director and CEO Praveer Sinha declined to comment on the development.The company had said it would be difficult to operate the plant beyond February 29 due to extreme liquidity crunch at a meeting held by Union power secretary Sanjiv Sahai last month. Industry sources said the 4,000-MW Mundra plant — one of the first four ambitious UMPPs in the country — has not been able to generate working capital for operations, and made cumulative losses of about Rs 11,000 crore, which has been funded by Tata Power and equity financing of Rs 5,000 crore.Sahai advised the five states to expedite their decision-making on revising power purchase agreements (PPAs) to allow the plant to recover fuel costs through consumer tariffs as the Centre does not have excess capacity from its share of electricity from central power plants to help them overcome an electricity shortage, said the sources cited earlier.Representatives of Haryana, Rajasthan, Punjab and Maharashtra expressed willingness to rework the PPAs, but they have not yet obtained approvals from their Cabinets, they said. Only the Gujarat government has approved the revised PPA. The five states need to approach the Central Electricity Regulatory Commission (CERC) once they approve the revised PPAs.A senior bureaucrat in Maharashtra told ET that the state was keen on allowing pass-through to Mundra plant due to the low cost of power. A decision was delayed due to assembly elections. He said electricity from the project will be cheaper at about Rs 3.10 per unit against the average power price of the state at Rs 3.80 per unit.At the power ministry meeting, a Maharashtra representative had said the new government is yet to take up the issue for discussion, while officials from Haryana and Punjab said their governments are actively considering the matter, sources said.Tata Power's Coastal Gujarat Power that operates the Mundra plant has offered additional concessions to the Punjab government that are being studied by the state. The Supreme Court had in October 2018 asked the CERC to decide on changes to the PPAs for three imported coal-based plants in Gujarat to let them pass on fuel costs.CERC had in April last year approved compensation by Gujarat and Haryana for imported coal costs to Adani Power's 4,620-MW plant. The three projects, including Essar Power's Salaya plant, have been fighting for compensation since 2010 after Indonesia introduced benchmark sale price, raising prices of imported coal.In 2017, the three companies had even offered majority stakes in their plants in Gujarat to the state government at Rs 1 each.

Bharat Biotech keen to revive Rs 600 crore TN vaccine complex

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NEW DELHI: Vaccine manufacturer Bharat Biotech International has proposed to partner with the government to revive the country's largest integrated vaccine complex in Tamil Nadu that is struggling to start operations due to cash crunch.The Hyderabad-based biotechnology company has offered to invest in the Rs 600-crore Integrated Vaccine Complex (IVC) at Chengalpattu, set up by HLL Biotech (HBL), a subsidiary of condom maker HLL Lifecare, in a recent letter to Union health minister Harsh Vardhan."The objective of this communication is to convey our deep interest and commitment to work with HLL Lifecare to manufacture and market several of our vaccines," it said. "We would work on a phasewise technology transfer to achieve this goal."ET has seen a copy of the letter.73077830 IVC was conceived in 2008 as a project of national importance to produce vaccines for the National Immunization Programme and make the country self-sufficient. With a planned annual capacity of 585 million, the project proposed to make pentavalent, or five-in-one, combination vaccine, BCG vaccine, and vaccines to prevent measles, hepatitis B, human rabies, Hib (haemophilus influenzae type b) and Japanese encephalitis (JE) in the first phase, which was to be commissioned by 2010.However, the project is still struggling to kick start, following shortage of funds."The situation is such that even the employees have not been paid their salaries for the last several months," said a person aware of the matter. "The project needs a fresh infusion of funds."People familiar with the development said HBL has been struggling financially as it awaits the proposed disinvestment of HLL Lifecare, pending which decisions on its requirement of additional funds have been halted.A government official said the health ministry is looking at various options including Bharat Biotech's proposal to revive IVC. "Once the ministry takes the decision, it will be taken to the cabinet for approval," the person said.Bharat Biotech has proposed four vaccine candidates to start with for the collaboration — rotavirus vaccine, JE, rabies vaccine and hepatitis B vaccine. "Our company is ready to engage in a dialogue with HLL Lifecare on all aspects of the collaboration, both commercial and technical," the company said in its letter to the health minister.

On analysts' radar: Trading bets that could shine in the New Year

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As the stock market continues its record-breaking spree, the search is on for trading ideas that will beat the benchmark indices. The new year has brought in many such opportunities, particularly in the midcap space where stocks are starting to see a pick-up after a long period of under-performance. Among sectors, metals is being viewed as a good trading bet with the possibility of a resolution to the US-China trade war. Here's a look at eight such trading bets by technical analysts for the first quarter of 2020.SUDARSHAN CHEMICAL INDSCMP: Rs 413.35Last 1-Year Change: 19.9%Target by March 31: Rs 470Sudarshan's shares are likely to gain nearly 14% in the next three months, according to IIFL, given the brokerage's target of Rs 470 by March 31. The brokerage has a positive view on the stock on a fundamental basis. Having steadily gained market share and become the world's 4th-largest colour pigment producer, Sudarshan is well-placed to continue its rapid growth in the context of the imminent exit of its two largest global competitors BASF and Clariant, said IIFL.EXIDE INDUSTRIESCMP: Rs 189.05Last 1-Year Change: -27.6%Target by March 31: Rs 208IIFL sees the stock touching Rs 208 by the end of the quarter, which implies an upside of 10% from current levels. Fundamentally, the brokerage is positive on the stock as it stands to benefit from auto replacement demand recovery, technology upgradation and launches, emerging opportunities in solar and e-rickshaws space, cost control as well as technology upgradation measures. The brokerage expects a 17% compounded growth in earnings per share over FY19-FY22 period.LARSEN & TOUBROCMP: Rs 1,345Last 1-Year Change: -5.7%Target by March 31: Rs 1,420L&T is well placed to navigate the weak investment environment, backed by a healthy balance sheet and strong technical execution capabilities, as per IIFL's view. There could be a near-term overhang due to uncertainty regarding the high speed rail ordering post the change of government in Maharashtra, which could impact order inflows in FY21. However, technical charts suggest the stock is headed higher in the next 3 months & IIFL expects it stock to rise to Rs 1,420 in this quarter.GRASIM INDUSTRIESCMP: Rs 766.60Last 1-Year Change: -6.06%Target by March 31: Rs 920Swapneel Mantri, technical analyst at Sushil Finance, views Grasim Industries as one of his top ideas for the quarter and expects the stock to touch Rs 920 in the next three months. "The scrip has been in an intermediate downtrend since the highs of 820 levels. The scrip has been in consolidation near the 720-740 zone and is showing signs of bottoming out," said Mantri. He recommends buying the stock at the current level with a stop loss of Rs 735 on weekly closing basis.HINDALCO INDUSTRIESCMP: Rs 220.20Last 1-Year Change: 2.7%Target by March 31: Rs 260-280Sushil Finance expects the stock to touch Rs 260 in the next three months. This means a potential gain of 18% by the March quarterend. "It has been in a downtrend since Rs 270 levels and now it has crossed its 200-DMA (day moving average) level of Rs 198 recently. It is showing signs of bottoming out," said Swapneel Mantri of Sushil Finance. Chandan Taparia of Hindalco, said the stock has formed a bullish harmonic pattern on the monthly chart. "Looking at the technical evidences, we are advising to buy the stock for an upmove towards 260-280 with a stop-loss of 200 levels," he said.TATA STEELCMP: Rs 484.95Last 1-Year Change: -1.8%Target by March 31: Rs 560"The stock has been consolidating in the range of Rs 390-Rs 400 levels for a long time. Post Brexit clarity, it has given a breakout and we expect the upward trend to continue," said Swapneel Mantri of Sushil Finance. Mantri expects the stock to rise to Rs 550-Rs 560 by the end of the quarter. 73055837 TATA MOTORSCMP: Rs 193.85Last 1-Year Change: 15%Target by March 31: Rs 225The Nifty Auto index has given a trendline breakout on the daily chart and is sustaining well above the same, said Chandan Taparia of Motilal Oswal. "Tata Motors rallied sharply in the last three months with healthy volumes, which is a positive sign for the stock. Looking at the current price structure, we won't be surprised to see an upmove towards Rs 215-225 levels soon. Thus, any decline towards Rs 185 shall be used as a buying opportunity with a stop-loss of Rs 174 levels," said Taparia.JUBILANT FOODWORKSCMP: Rs 1687.75Last 1-Year Change: 36.2%Target by March 31: Rs 1,830The stock is forming higher top-higher bottom formation over the last four months, said Taparia of Motilal Oswal. "The stock is sustaining above its consolidation phase of the last 9 weeks. RSI oscillator is sustaining above 60 levels on daily and weekly charts and it is showing strength in the counter. Looking at the chart structure, we are expecting an upmove towards Rs 1,830 levels," said Taparia. He recommends buying the stock with a stop loss below the Rs 1,605 level.

Risk sppetite for high-yield Indian bonds could sustain till Q1

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Timing, size and pricing with a clear strategy are essential for any non-banking finance company to raise funds overseas as the business faces many headwinds from banks with lower cost of funds, says Amrish Baliga, managing director at Deutsche Bank India. The appetite for high-yield Indian papers has gone up for global investors, Baliga told Saikat Das in an interview. Edited excerpts:What is your outlook for offshore loans and bonds in 2020?I am pretty confident going into 2020 on the back of a strong 2019. Our projected loan and bond pipeline looks strong. Markets continue to evolve. Heightened volatility levels are the new normal and our advice to clients has always been: Stay prepared. We will advise caution in the face of unforeseen volatility, which is more a function of how international markets play out to reams of relevant information.Are lower-rated NBFCs able to access overseas market amid risk aversion?A significant number of NBFCs are evaluating offshore liquidity taps. Roadshows are planned and investor education ongoing. Timing, sizing and pricing with a clear elucidation on business mix and growth may make a difference.What are global investor reactions to Indian high-yield paper?We saw a strong risk-on approach to Indian paper across sectors in 2019. Deutsche Bank brought landmark offerings in terms of novel structures and issuers from sectors that were relatively unknown to international investors. The response was overwhelming, depicting a risk-on mindset. The risk appetite for high-yield Indian paper has improved, subject, of course, to appropriate credit matrix.That would play out at least into the first quarter of 2020. You could see phases of caution where investors will wait and watch. Local companies need to tap the overseas market opportunistically.How do you compare the cost of borrowing between global and local markets?Evaluating fundraising via debt and equity is a function of access to liquidity; pricing of the instrument and pricing for the hedge (currency cover). Business mix also is a key factor. Whether entities have dollar revenues that act as a natural hedge goes into an evaluation. So, it is not just the cost of borrowing locally. Access to and availability of liquidity pools offshore will be factored in. There are various criteria that go into play when issuers evaluate a liquidity pick-up.How does the global rate trajectory look like?That is an interesting question. Even as economies the world over soften , the ability or tools for central banks appear limited. We have negative rates in many developed parts of the world, but that doesn't mean that investors in those jurisdictions will be pro-high-yield without a necessary track record and rationale.The share of negative yields may fall… But any improvements to pockets of global growth augur well for emerging markets with more inflows.The DB house view is that the repo rate in India will be cut by 65 bps to 4.5% over the course of 2020.Will the Essar judgement bring any change in India's distressed asset market?Absolutely. And that's very beneficial for Indian markets as we will see novel and deeper pools of liquidity, alternative sources of capital and expertise being brought to bear.This could also mean a quicker pace in turnaround and distribution of such risk to many participants. It's a fantastic outcome. As you are aware, we have significant presence in these type of funding/s and will look to partner newer entrants as the markets evolve.What is the way out for long-term funding in the Indian infrastructure sector? Banks now shy away from long-term loans.Indian issuers are moving more from momentum to project-related grading and issuances. A landmark issue that we helped bring to market was Adani Solar restrictive group project funding. The tenor and price was a first on many levels. What that did was to remove project risk from the bank market and introduce it to bond market.The Adani Group is a sophisticated issuer of such type of risk and our ability to work with them on landmark trade/s was a different experience, where project fundamentals were evaluated compared to plain momentum-driven issuance.For DB, how has the year 2019 been in arranging issues?The year (2019) has been a landmark year for a lot of our businesses. The depth and variety of our financing platforms were all put into play for our various clients and issuers.Whether it be our strong debt capital market team or our best-in-class financing and fixed income funding or our diverse equity-linked financing… there were many firsts and that's largely due to the faith that our clients and partners reposed in us.

Sterlite wins Rs 1,800 crore T-Fiber project in Telangana

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NEW DELHI: Data network solutions provider Sterlite Technologies Ltd (STL) on Thursday said that it has won the mandate to create a high-speed rural broadband network from Telangana Fiber Grid Corporation Ltd (T-Fiber).The multi-year deal worth about Rs 1,800 crore requires STL to design, build and manage a rural broadband network across 3,000 gram panchayats in Telangana.STL said that it will work with T-Fiber for enabling affordable and high-speed broadband connectivity to 60 lakh people in Telangana."The uniqueness of T-Fiber project is that it will connect every household across the rural part of the state through optical fiber and provide them high-speed internet connectivity," K.S. Rao, CEO, Network Software and Services, STL, said in a statement.STL was awarded the work order for about Rs 1,100 crore for phase-1 of the project, while the total project value is worth about Rs 1,800 crore.This turnkey project, which entails managing the network for an additional seven years, has a significant operations and maintenance revenue stream, close to 30 per cent of the overall project value.The scope includes rolling out end-to-end network connectivity by deploying 64,000 km of OFC (optical fibre cable) network, as well as deploying IP MPLS (multiprotocol label switching), a routing technique and GPON (gigabit passive optical network), a point to multipoint access to create seamless network connectivity.

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