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Sunday, February 9, 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


AGR may have killed the golden goose that Modi was banking on

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MUMBAI: The government may generate upfront payments of only around Rs 10,000 crore from spectrum auctions in the next fiscal year starting April 1, given the financial challenges faced by two major telcos Vodafone Idea and Bharti Airtel, telecom department officials have estimated.This implies that the next spectrum sale could fetch it only around Rs 35,000-40,000 crore overall as against the Rs 5.86 lakh crore worth of airwaves that the government wants to put on sale at base price, experts said.Telcos pay upfront 25% for the sub-1 GHz band and 50% for higher bands they win in auctions. The balance is paid over 16 years in equal instalments.Senior officials told ET that loss-making mobile phone operators Vodafone Idea and Bharti Airtel — facing a combined Rs 89,000 crore in new statutory dues — are expected to give the 5G spectrum a miss in the upcoming sale planned in March-April. 74053784 Airtel, though, is likely to pick up some 4G airwaves, especially in eight circles where its permits are expiring."Of the three players, Jio may take some 5G spectrum but not much, besides some 4G. We expect it will do so to get the firstmover advantage," said a government official, who did not want to be named.Loss-making Vodafone Idea, facing a survival threat and in the midst of a costly integration process, is expected to largely give the auctions a miss, officials said.Spectrum Renewal HopesThis means without the adjusted gross revenue dues, the government will fall way short of its Rs 1.33 lakh crore budgeted for the next fiscal year, with only Rs 20,000-25,000 crore expected to come from licence fees and spectrum usage charge.Airwaves across the 4G bands of 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2100 MHz, 2300 MHz and 2500 MHz, besides 5G spectrum in the 3300-3600 MHz bands, will be offered to Vodafone Idea, Bharti Airtel and Reliance Jio.The auction, expected in the first quarter of the next fiscal year, will see some 8,293.95 MHz of airwaves at an estimated total base price of Rs 5.86 lakh crore.These numbers, however, look very optimistic.'Unrealistic Pricing'"The government planning an auction is commendable, however, given the reserved prices for the most sought-after bands and the present financial condition of the industry, we do not believe the government will be able to garner any more than Rs 6,000-7,000 crore as upfront payment," said Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), which represents all private telcos."This is not to negate the fact that there are tremendous opportunities in India, but what is getting in the way is the unrealistic pricing of the key spectrum bands that are for 5G, and the 700 MHz band," Mathews added.The government had cleared a base price for 5G airwaves at Rs 492 crore per MHz and proposed the sale of a minimum 20 MHz blocks, which would mean a telco would have to spend close to Rs 50,000 crore for 100 MHz — the quantum it needs to offer quality 5G services.For the 700 MHz band, which was unsold at the previous auction, the DoT has cut the base price by 43% to ?6,568 crore a unit, or ?32,840 crore for a block of 5 MHz.Telcos have described the rates as expensive.Earlier this week, Bharti Airtel CEO Gopal Vittal reiterated in an earnings call that the 5G airwaves were priced too high. "…we will not pick it up at those prices", he said.Previously, Vodafone Idea and Reliance Jio had termed the 5G base prices as too expensive."At the stage that we are in and where there is tremendous pressure based on their financial health, the upcoming auctions are expected to be muted," said Prashant Singhal, global technology, media and telecommunications (emerging markets) leader at EY.Spectrum RenewalAll hopes are pinned on spectrum renewal."The best case for the government is to realise value from spectrum renewals from the incumbents, and this may help the government raise Rs 25,000 crore at most, of which Rs 10,000 crore may accrue in FY21. Over and above this has to be 5G spectrum auction, which seems very unlikely given the ecosystem and spectrum pricing," said Rajiv Sharma, head of research at SBICap Securities.If there is a 50% reduction in current 5G prices, then there may be some interest for 3,500 MHz and another Rs 20,000 crore could be raised in the fiscal year starting April 1, 2021, he said."So, to sum up, spectrum auction is not going to be more than Rs 35,000 crore," Sharma said.Already weighed down by debt of over Rs 7 lakh crore, loss-making telcos Bharti Airtel and Vodafone Idea are now facing over Rs 35,000 crore and Rs 53,000 crore, respectively, in adjusted gross revenue dues after a Supreme Court order last October.Both have filed a plea in the top court to be allowed to negotiate with the DoT on longer timelines and modalities for payment, in a bid to soften the financial blow. The court has yet to hear the matter.

Pharma firms in India now on virus watch

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NEW DELHI: A high-level committee constituted by the Department of Pharmaceuticals (DoP) is contemplating restrictions on the exports of some crucial antibiotics and vitamins in light of the coronavirus outbreak, said people aware of the matter. This comes as traders have been raising the prices of some bulk drugs for pharmaceutical companies amid the prolonged shutdown in China.India imports bulk drugs from China to manufacture antibiotics and then exports finished products to other countries. The committee is mulling various measures to ensure that India doesn't face any shortage of essential medicines in case the lockdown in China continues.Bulk drugs or active pharmaceutical ingredients (APIs) needed to manufacture antibiotics like metronidazole, chloramphenicol and azithromycin aside from Vitamin B6 are imported from Hubei province, whose capital Wuhan is the epicentre of coronavirus outbreak. Hubei is also rich in minerals and India also imports borax, copper, gypsum, rock salt, coal and magnesium from the province."We are looking at the export-import data, the bulk drugs and the finished product which may get disrupted in the next few days in case the lockdown in China persists," said a person who is part of the committee. 74054105 Panel writes to companies"If need be, the export of these medicines may be restricted," the person said.The committee is examining the impact of the shutdown in China on the pharmaceutical sector in India. The DoP on Friday asked Central Drugs Standard Control Organization (CDSCO) to examine to what degree India depends on China for bulk drugs, possible shortages of molecules and measures that can be taken to keep the situation under control.The committee of experts formed by DoP comprises Joint Drugs Controllers, officials from the directorate general of foreign trade and executives from pharma lobby groups. The lobby groups — Indian Drug Manufacturers' Association (IDMA), Organisation of Pharmaceutical Producers of India (OPPI), and Bulk Drug Manufacturers Association (BDMA) of India — are working with the government to determine the stock position with pharma companies."We have written to the companies to share their inventory position with us — how much stock is available with them? If they have any Plan B in case their APIs get exhausted," said another member of the committee.India is dependent on China for a large number of APIs and intermediates required to manufacture pharmaceutical formulations.China's decision to extend the Lunar New Year holidays and the quarantine of more than 45 million could make imports of key raw materials difficult. At least 24 provinces, municipalities and regions in China have told businesses not to resume work before February 10. The Lunar New Year holiday was initially set to run from January 24 to 30, with work resuming on January 31. Hubei has told businesses not to reopen until at least February 14. Some expect the shutdown to be extended further."As of now we are ok," said Cipla Global CFO Kedar Upadhye. "We store APIs and intermediates… we do store two months of stock as part of the inventory holding norms. So, if the plants do not start by end February, then it will become a delicate situation not only with us, but for entire pharma industry in terms of supply chain."Jiangsu province, which has over 128 pharmaceutical units, is more than 700 km away from the epicentre. Shandong province has 118 facilities that make APIs and intermediates on which India is dependent. "The situation will be clear in the next few days. If the lockdown continues, the pharma industry will face shortages."Traders dealing in bulk drugs or APIs in India have already started to increase prices sharply. APIs are key raw materials used to manufacture pharmaceutical formulations like tablets, capsules, and syrups. According to industry sources, on average, API prices have increased 10-15%. However, in some cases, the increase has been more than 50%.The industry is bracing for difficult times ahead as the coronavirus spreads."We are already seeing the impact with a steep increase in rates of some key raw materials and seeing some shortages," said Sunil Attavar, president of Karnataka Drugs and Pharmaceuticals Manufacturers' Association (KDPMA). "The prediction that our overdependence on a single source of APIs and KSMs (key starting materials) is a strategic risk is unfortunately true. More than price increases the industry is afraid of shortages that will disrupt production and availability of some essential medicines."

FM's new tax system: Will it save you money?

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Some taxpayers were expecting the tax slabs to be widened. Others were hoping the exemptions and deductions would be increased. Everybody wanted the tax structure to be simplified and their tax to come down. Budget 2020 dashed a lot of these hopes. While it has indeed widened the tax slabs and reduced the tax rates, taxpayers who opt for the new regime will have to forego most of the exemptions and deductions that taxpayers avail of.Out go all the exemptions and deductions under Chapter VI-A, including the house rent allowance (HRA), investments under Section 80C, NPS contribution, medical insurance premium and even the leave travel allowance which is tax free if claimed once in a block of two years. The deductions under Chapter VI-A add up to a huge amount. In their returns for the financial year 2017-18, individual assessees claimed deduction for more than Rs 4.45 lakh crore.The removal of tax exemptions and deductions certainly makes compliance less tedious, but avid tax planners who maximised their tax deductions will probably pay more tax under the new regime. In effect, the budget has tried to put more money in the hands of taxpayers by curtailing the incentives to save.On its part, the Finance Ministry expects four out of five taxpayers to move to the new tax regime. It analysed the income and investment data of 57.8 million taxpayers and found that 69% would save on tax under the new system. Another 20% might want to switch to avoid the hassles and paperwork involved in tax planning.New tax slabs and rates 74024695 Will you benefit?Tax was already quite confusing for the average Indian. With three more tax slabs, the new tax regime has only added to the confusion. Taxpayers are trying to figure out whether the new tax structure is more beneficial. Several websites have come out with calculators that help individuals figure this out. The Income-Tax Department itself has launched an e-calculator to estimate the tax liability under the new tax slabs. It compares taxes in the old and the new tax regime.You don't really need to do an elaborate calculation to know this. The answer is actually quite simple. Anyone claiming tax exemptions and deductions of more than Rs 2.5 lakh in a year will not gain from the new structure.This threshold of Rs 2.5 lakh includes the standard deduction of Rs 50,000 for which no investment is required. All salaried taxpayers are eligible for this, which leaves only an additional deduction of Rs 2 lakh. Of this, Rs 1.5 lakh is taken care of by Section 80C investments. The average taxpayer also claims exemption for HRA or claims deduction for the interest paid on a home loan. Then there are other deductions such as the contribution to the NPS, the interest on education loans, treatment of illness and for disabilities. There is also the small but widely claimed exemption of up to Rs 10,000 for savings bank interest under Section 80TTA.What goes outSome of the 70 exemptions and deductions you won't get in new regime. Check which of these you are claiming now.Standard deduction: Rs 50,000House rent allowance: Depends on salary structure and rent paidHousing loan interest: Rs 3.5 lakh for affordable housing, Rs 2 lakh for othersInvestments under Sec 80C: Rs 1.5 lakhLeave travel allowance: Tax free if claimed once in block of two yearsNPS contribution: Rs 50,000Medical insurance premium: Rs 25,000 (Rs 50,000 for parents and senior citizens)Savings bank interest: Rs 10,000 under Sec 80TTAInterest income (for senior citizens): Rs 50,000 under Sec 80TTBEducation loan interest: Interest paid for eight consecutive yearsDisability of self or dependant: Rs 75,000 to Rs 1.25 lakh depending on disabilityTreatment of self or dependant for specified disease: Rs 40,000 (Rs 1 lakh for senior citizens)Donations to specified entities: 50-100% of the amount donatedWhat staysSome 50 tax exemptions have been left untouched in the Budget. These include:Standard deduction on rent: 30% of the rent receivedAgricultural income: No limitIncome from life insurance: If insurance cover is 10 times the annualised premiumRetrenchment compensation: Rs 5 lakhVRS proceeds: Rs 5 lakhLeave encashment on retirement: Rs 3 lakh (No limit for govt workers)This threshold of Rs 2.5 lakh deduction applies to income above Rs 15 lakh. The breakeven point is even lower for those in the lower income brackets. Mrinal Chakraborty claims deductions of only Rs 2.2 lakh, but will pay more tax if he shifts to the new regime. "The 2020 budget has not lived up to the expectations of taxpayers. The income tax proposals are disappointing," says Ankur Choudhary, Co-Founder & CIO, Goalwise.com. 74024718 In Pic: Mrinal Chakraborty, 31 years, IT professional, PuneLow income taxpayerHe doesn't claim too many deductions but his tax will rise by more than Rs 16,000 if he switches to the new structure.Taxable income: Rs 8.2 lakhDeductions claimedStandard deduction: Rs 50,000Sec 80C: Rs 1.5 lakhMedical: Rs 20,000Total deductions: Rs 2.2 lakhTax (old): Rs 33,800Tax (new): Rs 49,920 74024739 In Pic: Medha Gupta, 35 years, private sector employee, NoidaTaxpayer with high deductionHRA exemption and deductions reduce her tax significantly. She will lose roughly Rs 48,000 under the new structure.Taxable income: Rs 11 lakhDeductions claimedStandard deduction: Rs 50,000HRA: Rs 1.68 lakhSec 80C: Rs 1.5 lakhMedical insurance: Rs 50,000TOTAL DEDUCTIONS: Rs 4.18 lakhTax (old): Rs 50,856Tax (new): Rs 98,800Can anybody save Rs 78,000?Finance Minister Nirmala Sitharaman said in her budget speech that a taxpayer earning Rs 15 lakh will save Rs 78,000 in tax under the new regime. However, this assumes that the taxpayer is not claiming any deduction at all. In reality, the standard deduction applies automatically to all salaried taxpayers. Also, there are several expenses that are eligible for tax benefits, such as tuition fee of up to two children which can be claimed as a deduction under Section 80C. 74024760 In Pic: Sameer Gokhale, 49 years, CEO of tech firm, PUNEHigh income earnerMoving to new structure will hike his tax by Rs 52,000 but reduce compliance headaches for this high-income earner.Taxable income: Rs 38 lakhDeductions claimedStandard deduction: Rs 50,000Sec 80C: Rs 1.5 lakhHome loan interest: Rs 1.8 lakhMedical insurance: Rs 12,000Donations: Rs 25,000Total deductions: Rs 4.17 lakhTax (existing): Rs 8.60 lakhTax (new): Rs 9.12 lakhThe new tax structure will suit those who don't claim too many deductions or want to avoid the paperwork of tax planning. This could include non-salaried taxpayers (including consultants) who are not eligible for the host of exemptions and deductions under Chapter VI-A. It could also include senior citizens who do not draw a pension from their employer and are therefore not eligible for the standard deduction of Rs 50,000.However, senior citizens earn a big chunk of their income from interest and enjoy an exemption of Rs 50,000 for interest income under the newly introduced Section 80TTB. Retired PSU staffer T. Joseph gets pension from his former employer and also earns interest. He will be better off in the existing tax regime. 74024769 In Pic: T. Joseph, 61 years, Retired PSU employee, DelhiSenior citizen pensionerHis tax will shoot up by Rs 18,200 under the new structure. He is better off in the existing regime.Taxable income: Rs 9 lakhDeductions claimedStandard deduction: Rs 50,000Sec 80C: Rs 1.5 lakhInterest income Sec 80TTB: Rs 50,000Total deductions: Rs 2.5 lakhTax (old): Rs 41,600 Tax (new): Rs 59,800No incentive to saveThe option to remove tax exemptions and deductions is also worrying investment experts. Section 80C forces individuals to save, and they will be weaned off savings if there is no tax incentive. "The impetus seems to be towards spending, rather than focusing on longer term financial security for individuals. Individuals who opt for the new tax regime and forgo tax exemptions may end up spending money than use it towards their financial safety and security," says Tarun Chugh, Managing Director and CEO of Bajaj Allianz Life Insurance. "The alternative provided to individuals for lower tax rates if they do not claim exemptions and deductions does not seem too attractive. The new system discourages investments," says Dhiraj Relli, Managing Director & CEO, HDFC Securities.In fact, tax benefits are the prime drivers of investment decisions in India. The NPS was always a very good investment opportunity but it started attracting investors only after the additional tax deduction of Rs 50,000 was introduced in 2015. It became even more popular after the new rule that makes 60% of the corpus tax free on maturity came into effect. "Doing away with the exemptions goes against the basic concept of financialisation of savings," rues Swarup Mohanty, Managing Director and CEO, Mirae Asset Mutual Fund.On the other hand, some experts feel that the budget has done the right thing by separating tax benefits from investments. "In the name of tax savings, many taxpayers are making significant and far reaching investment mistakes. This misbuying may stop after the tax incentives are removed," says Nitin Vyakaranam, Founder and CEO of financial planning firm Arthayantra. His views are echoed by others. "The core objective of insurance is protection. It's time the middle class bought insurance for its real benefit, which is protection," says Yashish Dahiya, Co-founder & CEO, Policybazaar.com.Choose between old and newTo be fair, taxpayers will have the option to switch to the new tax structure. "This is a good move because taxpayers will be able to make the choice depending on their financial situation," says Sudhir Kaushik, Co-founder of Taxspanner. "Taxpayers who avail several exemptions and deductions such as house rent allowance and Section 80C deductions may not benefit from switching to the new system," says Amit Maheshwari, India Tax Leader at Ashok Maheshwary & Associates.What's more, CBDT chairman P.C. Mody has clarified that individual taxpayers will have the option to switch from the old regime to the new structure and vice versa every year. If a taxpayer has made certain investments or expenses in a certain year, he can shift to the old system. However, Mody also clarified that business owners won't have this option to switch back and forth every year.The budget has, however, left the surcharge on tax untouched. Taxpayers with income between Rs 50 lakh and Rs 1 crore will continue to pay 10% surcharge on the tax. The surcharge is 15% for income between Rs 1 crore and Rs 2 crore, 25% for between Rs 2 crore and Rs 5 crore and 37% for income over Rs 5 crore.So taxpayers earning just below these threshold limits will not benefit if they forego the exemptions and move to the new tax regime.id: 74024374

Oscars LIVE: Bong Joon-ho wins big

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KFC owner reports ‘exceptional quarter’, picks up stake in DIL

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New Delhi: Yum! Restaurants India, owner of KFC, Pizza Hut and Taco Bell, had an 'exceptional quarter-basis value innovation and expanding digital channels', the restaurant chain's global chief executive David Gibbs said in a post earnings call for the fourth quarter."India had another exceptional quarter with 12% same-store sales growth, ending the year with 10% same-store sales growth. Their momentum is attributable to marketing around value innovation and expanding digital channels," he said. Gibbs named India, Canada, Japan and Europe as markets with internationally strong sales momentum for the year.In a simultaneous development, Yum! Restaurants, Indian subsidiary of Yum! Brands, has picked up minority stake in its largest franchise partner RJ Corp-owned Devyani International (DIL), one of the first franchisees globally where the restaurant major has acquired equity stake. This follows DIL's acquisition of 74 KFC restaurants from Yum! over the last 18 months."Yum! is looking at India as its next biggest bastion of growth after China, and the strategic equity investment strengthens our association with them. Our consumption outlook is double digit growth for the business, riding on scale investments," RJ Corp chairman Ravi Jaipuria told ET. DIL operates 500 KFC and Pizza Hut stores in India.A notice by Competition Commission of India (CCI), approving the proposed combination between Yum! Restaurants and DIL, estimated the book value of the assets of the business undertaking comprising of 61 KFC restaurants at less than ?350 crore.The India development comes at a time when the Kentuckyheadquartered restaurant chain said its 2020 results were likely to fall short of its long-term outlook, weighed down by the deadly coronavirus outbreak in its biggest market China and lagging sales of Pizza Hut in home market the US. "While Yum's business model is highly diversified, this will certainly be a headwind for 2020," Gibbs told analysts.Yum!'s overall presence in India is spread across quick service brands KFC and Pizza Hut and mexican cuisine based Taco Bell. In all, it operates over 1,000 restaurants in the country.74053788 DIL president Virrag Josshi said the company would double the base of KFC and Pizza Hut restaurants over the next four-five years. "Over the next five years, DIL plans to invest over ?1,000 crore in growing its brands including KFC, Pizza Hut, Costa Coffee, Vaango and food courts."Yum! follows the global strategy of doing away with capital-intensive operations to instead focus on brand growth and development. Over 98% of the KFC business globally, spread across 145 countries, is now operated by independent franchise owners. In India, while Pizza Hut is already entirely franchised, KFC's company-operated footprint is under 10% in India.The chain, which competes aggressively with Domino's, McDonald's and Burger King, has split its entire franchise operations between two partners. Besides DIL, its other franchise partner in India is Sapphire Foods, set up by a consortium of funds led by Samara Capital in 2016.

Spectrum sale may fetch only Rs 10,000 crore initial payment

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MUMBAI: The government may generate upfront payments of only around Rs 10,000 crore from spectrum auctions in the next fiscal year starting April 1, given the financial challenges faced by two major telcos Vodafone Idea and Bharti Airtel, telecom department officials have estimated.This implies that the next spectrum sale could fetch it only around Rs 35,000-40,000 crore overall as against the Rs 5.86 lakh crore worth of airwaves that the government wants to put on sale at base price, experts said.Telcos pay upfront 25% for the sub-1 GHz band and 50% for higher bands they win in auctions. The balance is paid over 16 years in equal instalments.Senior officials told ET that loss-making mobile phone operators Vodafone Idea and Bharti Airtel — facing a combined Rs 89,000 crore in new statutory dues — are expected to give the 5G spectrum a miss in the upcoming sale planned in March-April. 74053784 Airtel, though, is likely to pick up some 4G airwaves, especially in eight circles where its permits are expiring."Of the three players, Jio may take some 5G spectrum but not much, besides some 4G. We expect it will do so to get the firstmover advantage," said a government official, who did not want to be named.Loss-making Vodafone Idea, facing a survival threat and in the midst of a costly integration process, is expected to largely give the auctions a miss, officials said.Spectrum Renewal HopesThis means without the adjusted gross revenue dues, the government will fall way short of its Rs 1.33 lakh crore budgeted for the next fiscal year, with only Rs 20,000-25,000 crore expected to come from licence fees and spectrum usage charge.Airwaves across the 4G bands of 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2100 MHz, 2300 MHz and 2500 MHz, besides 5G spectrum in the 3300-3600 MHz bands, will be offered to Vodafone Idea, Bharti Airtel and Reliance Jio.The auction, expected in the first quarter of the next fiscal year, will see some 8,293.95 MHz of airwaves at an estimated total base price of Rs 5.86 lakh crore.These numbers, however, look very optimistic.'Unrealistic Pricing'"The government planning an auction is commendable, however, given the reserved prices for the most sought-after bands and the present financial condition of the industry, we do not believe the government will be able to garner any more than Rs 6,000-7,000 crore as upfront payment," said Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), which represents all private telcos."This is not to negate the fact that there are tremendous opportunities in India, but what is getting in the way is the unrealistic pricing of the key spectrum bands that are for 5G, and the 700 MHz band," Mathews added.The government had cleared a base price for 5G airwaves at Rs 492 crore per MHz and proposed the sale of a minimum 20 MHz blocks, which would mean a telco would have to spend close to Rs 50,000 crore for 100 MHz — the quantum it needs to offer quality 5G services.For the 700 MHz band, which was unsold at the previous auction, the DoT has cut the base price by 43% to ?6,568 crore a unit, or ?32,840 crore for a block of 5 MHz.Telcos have described the rates as expensive.Earlier this week, Bharti Airtel CEO Gopal Vittal reiterated in an earnings call that the 5G airwaves were priced too high. "…we will not pick it up at those prices", he said.Previously, Vodafone Idea and Reliance Jio had termed the 5G base prices as too expensive."At the stage that we are in and where there is tremendous pressure based on their financial health, the upcoming auctions are expected to be muted," said Prashant Singhal, global technology, media and telecommunications (emerging markets) leader at EY.Spectrum RenewalAll hopes are pinned on spectrum renewal."The best case for the government is to realise value from spectrum renewals from the incumbents, and this may help the government raise Rs 25,000 crore at most, of which Rs 10,000 crore may accrue in FY21. Over and above this has to be 5G spectrum auction, which seems very unlikely given the ecosystem and spectrum pricing," said Rajiv Sharma, head of research at SBICap Securities.If there is a 50% reduction in current 5G prices, then there may be some interest for 3,500 MHz and another Rs 20,000 crore could be raised in the fiscal year starting April 1, 2021, he said."So, to sum up, spectrum auction is not going to be more than Rs 35,000 crore," Sharma said.Already weighed down by debt of over Rs 7 lakh crore, loss-making telcos Bharti Airtel and Vodafone Idea are now facing over Rs 35,000 crore and Rs 53,000 crore, respectively, in adjusted gross revenue dues after a Supreme Court order last October.Both have filed a plea in the top court to be allowed to negotiate with the DoT on longer timelines and modalities for payment, in a bid to soften the financial blow. The court has yet to hear the matter.

Talking stock: YES Bank a 3-year play; sell IEX, buy BSE

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By G ChokkalingamFounder, Equinomics Research & AdvisoryI am holding 100 shares of Lupin bought at Rs 1,600. Please suggest what to do. S V GOPALI suggest adding more shares to reduce average cost as I believe that divestment of Japanese business is significantly positive and it would be able to resolve most of regulatory issues of US FDA in about 18 months' time. While short-term target could be around Rs 900, which is around 21 times FY2021E EPS, the stock could recover beyond Rs 1,100 in 2-3 year period.I bought 100 shares of IEX at Rs 178. Shall I buy or wait for correction? JAYDEEP BHATTACHARJEEYou may sell IEX and use proceeds to buy BSE, which is much cheaper than IEX in terms of valuation multiple. While BSE trades around 17 PE, IEX trades over 28 PE on expected earnings of FY2020. BSE is evolving as an exchange, offers dividend yield of around 5.5 per cent, and its cash holding and current market value of CDSL together exceed its market cap substantially.I am holding 500 shares of Aditya Birla Capital at Rs 175. Can I purchase more for average? H N JAJUAditya Birla Capital is trading around 2.3 times of its book value. The fair value is around Rs 120 in my view.I hold 18,000 shares of Yes Bank at an average cost of Rs 203. Is there any likelihood of recovering my investment over next one year? RAJEEV BATRAYes Bank is trading around 0.5 times price-to-adjusted book value. It is very difficult for an analyst to predict whether any new investor would come into Yes Bank at a good price with substantial resources and to forecast what would be the quantum of incremental stress from NPAs in the next two quarters. However, even if the bank faces another 30 per cent dent on its current net worth in terms of additional NPAs, its price-to-adjusted book value would be still around 1time. Hence, if you are a risk-taking investor, you may hold on to Yes Bank for long-term (2 to 3 years) to possibly recover a significant portion of cost.I hold shares of IDFC First Bank at Rs 45 and my investment horizon is 5 years. Can it turn out to be a dark horse? OJAS AGARWALYou may hold it with a target price of around Rs 65, which is close to 2 times its current adjusted book value. Renewed competition from both existing and new banking players, almost peak out of banking penetration in urban centres and huge equity capital base of the bank will act as a drag for any upside beyond Rs 65.I have 5,500 shares of R Systems at Rs 54. Please advise. MALAIARASANYou may exit R Systems if it moves to around Rs 75 as it already trades around 1.2 times enterprise value-toannual revenues and at a PE valuation of around 17x current year's earnings. These valuation multiples are higher than other mid-sized IT companies like Cyient .I am holding CSB Bank at Rs 292, Future Retail at Rs 412, Havells India at Rs 662 and Oriental Bank at Rs 54. Should hold or sell? N S KHANNAIf CSB moves up 5 per cent to10 per cent from the current level, please sell it as it trades at the costliest valuation of over 2.5 times price-to-adjusted book value in the old private sector banking space. Considering the substantial fall in the stock price and significant fall in valuation multiple to 26 times current year earnings and also the business collaboration with Amazon, you may hold Future Retail stock till it recovers your cost price. I find PE multiple of over 52 for the current year's expected earnings quite stretched considering poor year-or-year revenue growth, and hence, suggest selling the stock, if Havells India moves close to your cost price. Hold Oriental Bank for one to two years with a target price of around Rs 73, which is 1 time the current adjusted book value. I firmly believe that the PSU banks would be able to finally come out of the rising NPA stress within 12 to18 months and then start rectifying significant discount seen in their market prices in relation to their adjusted book values.Please send your queries on Stocks to et.stocks@timesgroup.com; Mutual Funds to et.mfs@timesgroup.com; Tax to et.tax@timesgroup.com; Insurance to et.insurance@timesgroup.com; Realty to et.realty@timesgroup.com.

Traders go short on Eicher and ITC, add long positions in HUL

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The February derivatives series is abuzz with activity as stocks react to the budget announcements and corporate earnings. Traders have added short positions in the futures of select PSU stocks as a hedge while subscribing to the latest tranche of CPSE ETF. ET takes a look at 5 stocks which are gaining momentum in the February derivatives series.COAL INDIACMP (Rs ): 184.95 OI Chg in February Series (%): 113.1 Share Price Change in February series (%): -12.7Select PSU stocks are the top OI gainers in the February series. The 7th trance of CPSE ETF was launched last month. "These stocks are part of CPSE ETF. There was a 3% ETF discount and to capture that, they apply for the units and go short in top stocks of the basket," said Amit Gupta, head of derivatives, ICICIdirect. The stock has support at Rs 160 and if it holds that, short covering can take the stock to Rs 220, said Gupta. Analysts said these short positions will see closure towards the end of the series.NTPCCMP (Rs ): 115.6 OI Chg in February series (%): 84.7 Share Price Change in February series (%): -3.1NTPC has also seen addition of short positions as investors shorted the futures and applied in the ETF. Motilal Oswal has maintained 'buy' rating on NTPC with a target price of Rs 154 but said risks related to government divestment and uncertainty on value accretion over the potential acquisition of NEEPCO and THDC could be an overhang on the stock in the near term.EICHER MOTORSCMP (Rs ): 19,736 OI Chg in February series (%): 15 Share Price Change in February series (%): -6.9The stock has fallen in the February series tracking weak December quarter results. "...we do not expect a sharp pick-up in volumes over the near term. In the absence of sufficient upsides to current stock price and uncertainty on BS VI platforms, we downgrade to 'neutral' from 'buy' with TP of Rs 21,800 (Rs 25,600 earlier)," said Citigroup Global Markets in a recent note.ITCCMP (Rs ): 213.40 OI Chg in February series (%): 10 Share Price Change in February series (%): -10.5An increase in indirect taxes on cigarettes in the Union budget on February 1 has dampened sentiment around the stock. Kotak Institutional Equities has lowered the target price on the stock to Rs 300 from Rs 320 and maintained 'buy' rating. "ITC's 3QFY20 (third quarter) print, while decent, wasn't good enough to lift the muted sentiments on the stock. To add to the pressure, the Union budget raised NCCD on cigarettes substantially – portfolio-level weighted-average increase of around 10% in total tax incidence per stick," said Kotak Institutional.HINDUSTAN UNILEVERCMP (Rs ): 2,159.95 OI Chg in February series (%): 13.3 Share Price Change in February series (%): 12.1Traders have built long positions in the February futures of Hindustan Unilever after the FMCG major reported better-than-expected result for the December quarter. CIMB Securities has recently upgraded the stock to 'add' with a higher target price of Rs 2,313. "Ability to grow ahead of the market and its continued focus on new product launches are encouraging. We believe margins will continue to expand and leverage benefits due to the merger of GSK Consumer will be visible in FY21," said CIMB Securities.

Tech platforms fight to control coronavirus rumours

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BENGALURU: Technology platforms are fighting to control misinformation regarding the novel coronavirus through search prompts, removal of content and by teaming up with fact checkers, amid a social media deluge of alarming warnings, possible cures and rumours regarding the virus that originated in China.On Friday, Twitter launched a dedicated search prompt for India with the ministry of health and family welfare and the World Health Organization (WHO) to ensure that individuals immediately get authoritative health information from the right sources when they search about the virus.Facebook, Google and YouTube also flash the same link to the WHO website if 'coronavirus' or related terms are searched on their platforms. 74050818 Some Indians have enthusiastically taken to the Internet to 'educate' fellow users on the prevalence of the virus, possible prevention measures and cures.While most videos correctly ask people to avoid crowded places, wear a mask and maintain basic hygiene, some have incorrectly claimed that ayurvedic remedies, including garlic and mint leaves, can cure the virus. Some have even created alarm by saying patients infected by the virus have a zero survival rate.The virus, first identified in Wuhan in Hubei Province last year, causes respiratory illness. It is transmitted between people and animals. Scientists have yet to find a vaccine for the infection. The death toll has crossed 800 in China, while total infected cases have crossed 37,500.Facebook has also started removing content with claims and conspiracy theories that have been debunked by the WHO or other credible health experts and which could cause harm to people who believe them. The social media behemoth is focusing on claims where, if someone relies on the information, it would make them more likely to get sick or not get treatment. This includes claims related to false cures or prevention methods - like for instance ones that say that drinking bleach cures the infection - or claims that discourage treatment or create confusion about health resources that are available."As the global public health community works to keep people safe, Facebook is supporting their work in several ways, most especially by working to limit the spread of misinformation and harmful content about the virus and connecting people to helpful information," said Kang-Xing Jin, Head of Health at Facebook in a blogpost.Chinese short-video platform TikTok, owned by ByteDance, has put out a warning in 8 Indian languages for its users, asking them to verify facts with trusted sources, including the WHO or resources from the local government while creating, viewing or interacting with novel coronavirus-related content.It has also asked users to report content that they think violates TikTok's community guidelines. Videos with #Coronavirus hashtag have been viewed a staggering 786 million times on TikTok.