Top biz headlines: Voda-Idea loss spillover, Maruti stock downgrade & more

From banks raising funds to grab NBFCs' share to Comcast-led group's offer to Zee promoters, here are the top business headlines on Tuesday

1) Voda Idea losses spill over to other AB Birla group firms; m-cap down 6.2%

The continued losses at Vodafone Idea are spilling over into other AB Birla group firms, led by Chairman Kumar Mangalam Birla. The combined m-cap of the AB Birla group firms was down 6.2 per cent on Monday, led by losses at Vodafone Idea. In all, group firms lost nearly Rs 18,000 crore m-cap on Monday. The telecom major has lost 44.3 per cent of its m-cap in July, wiping out most of the gains it made after it raised Rs 25,000 crore by way of a rights issue in May this year.

Vodafone Idea now has a m-cap of Rs 19,454 crore against Rs 39.942 crore at end of last month.

The biggest surprise for the analysts was, however, a sharp 9 per cent fall in Grasim Industries stock price, the flagship company and the main operating and holding company for the AB group. It was the worst fall in Grasim share price in the last two years, raising fears about a spill-over effect from Vodafone Idea's poor performance. (Read more here)

2) Bajaj father-son duo hits out at govt on slowdown, EV policy flip-flop 

At the 12th annual general meeting (AGM) of Bajaj Auto on Friday, the company’s shareholders heard the father-son duo — Chairman Rahul Bajaj and Managing Director Rajiv Bajaj — take on the government for its inability to kick-start growth. They also criticised the government for sending out confusing signals regarding the e-vehicle policy.

Eighty-one-year-old billionaire Rahul Bajaj criticised the government for being in denial about growth prospects. His son Rajiv Bajaj said the government’s frequent flip-flop on EVs have left the industry, reeling from slowdown and staring at job losses, confused. (Read more here) 

3) Maruti stock downgrade reflects growing woes of the auto sector

Maruti Suzuki India Ltd's shares have plunged this year, impacted by worries about future growth at the country's largest carmaker amid changing government rules, particularly regarding electric vehicles, intensifying competition and a demand squeeze, LiveMint reported on Tuesday.

The company's domestic vehicle sales have fallen over 19 per cent to 374,481 units in the June quarter, which was the sharpest drop since the third quarter of 2000-01, the report said. This has taken a toll on Maruti's financials, as well as stock performance, added the report. 

4) Rise in rating downgrades reflects slump in economy

The rate at which non-performing assets (NPAs) at banks are growing has slowed down, which indicates an improvement in the asset-quality situation, but debt downgrades have overtaken upgrades for the first time in at least three years, the Economic Times reported on Tuesday. Select ratings agency executives have told the financial daily that this reflected the slump in the broader economy and didn't mean that bad loans were set to increase. 

According to the report, a Prime Database analysis of credit ratings agency actions in the six months since January revealed that downgrades had outpaced upgrades by two to one for the first time since 2016. The downgrades numbered 167, against 73 upgrades, added the report. In 2016 also, the downgrades had been higher than the upgrades, Prime Database said. However, the gap was much less then at 71-58, added the report. 

5) Banks raising funds to grab NBFC share

Top public and private sector lenders are going in for fundraising as they aim to wrest market share from non-banking finance companies (NBFCs) that are facing a credit crisis and smaller state-run banks that are weighed down by bad loans, the Economic Times reported on Tuesday. 

Three top public sector banks — State Bank of India, Bank of Baroda and Canara Bank — and two private ones — Axis and RBL Bank — are planning to raise an aggregate amount of up to Rs 62,000 crore this year to accumulate growth capital, added the report. 

6) SBI cuts deposit rates sharply, other lenders may follow suit

State Bank of India (SBI) cut its deposits rates for fresh funds across segments on Monday, in view of the falling interest rate scenario and surplus liquidity.

The term deposit rates will be 20 basis points (bps) lower for retail customers and 50-75 bps lower for deposits up to 179 days. For bulk deposits of Rs 2 crore and above, the rate cut would be as much as 35 bps. The new rates are effective August 1.

This would mean lending rates would be cut sharply, too. This will then pass through the cumulative 75 bps rate cuts by the Reserve Bank of India (RBI). And SBI’s move is likely to be followed by other banks. “SBI is the leader. Once SBI does something on rates, others will have to follow,” said Ananth Narayan, associate professor, finance at SP Jain Institute of Management and Research. (Read more here) 

7) More than 36% of registered companies have 'closed' down in India

More than 36 per cent (680,000) of registered companies in India have “closed” down as per the latest numbers provided by the ministry of corporate affairs (MCA) in Parliament. There are around 1.9 million companies registered with the government, the data shows.

While the percentage has moved up only marginally since 2017-18, it is a big jump from the 20 per cent share that closed companies occupied in earlier periods. (Read more here) 

8) Comcast-led group makes offer to buy out Zee promoters

A Comcast-led consortium, which also includes Atairos, Blackstone and James Murdoch's Lupa Systems, submitted a binding offer on Monday to buy out Subhash Chandra from Zee Entertainment, the Economic Times reported on Tuesday, while citing sources aware of the development.

According to the report, sources close to Zee said that they had not received any bid up till late Monday evening. The report added that Zee Entertainment Managing Director Punit Goenka had last week told the financial daily that the company had received one binding agreement for purchase of stake and that it was expecting another one in the days to come. However, said the report, he did not disclose the bidders' identity. Earlier, according to ET, Goenka had said that he was expecting to sign a binding agreement by July-end. 

9) Bharti Airtel, Reliance Jio, Vodafone Idea oppose free spectrum to railways

Bharti Airtel, Reliance Jio, and Vodafone Idea have in tandem opposed allocation of the premium 700 MHz spectrum to Indian Railways for Wi-Fi and signaling purposes, citing the commercial value of such airwaves and their potential to earn revenue for the government.

The industry has said spectrum allotted to the Railways for captive use should not be utilised for commercial services for passengers (Wi-Fi and internet offerings) as such services should be kept for entities that hold a valid licence. (Read more here) 

10) Telecom firms owe over Rs 92,000 cr as licence fees till date: Centre to SC

Leading private telecom firms like Bharti Airtel, Vodafone and state-owned MTNL and BSNL have pending licence fee outstanding of over Rs 92,000 crore till date, the Centre has told the Supreme Court.

In an affidavit filed in the top court, Department of Telecom (DoT) said that as per calculations, Airtel owes Rs 21,682.13 crore as licence fee to the government. Dues from Vodafone totalled Rs 19,823.71 crore while Reliance Communications owed a total of Rs 16,456.47 crore, DoT said. BSNL owed Rs 2,098.72 crore while MTNL owed Rs 2,537.48 crore, it said. (Read more here)