Day: September 19, 2024

Shares of Vodafone Idea plunge 15%, following the Supreme Court’s decision against AGR dues

Posted on by Btech Traders

Shares of Vodafone Idea have declined as much as 15% on Thursday after the Supreme Court upheld the Adjusted Gross Revenue ruling against the telecom companies and upheld the quantum of the AGR demand.

Vodafone Idea’s AGR dues currently stand at ₹70,300 crore.

In its decision, the Supreme Court stated that it had reviewed the curative petitions and related materials and that the telecom corporations had not proven any case. The Supreme Court rejected the petitions as a result. The telecom providers had alleged that there were arithmetic problems in the AGR dues computation.

A good ruling from the Supreme Court might have given Vodafone Idea an upside of ₹5 per share, but in the wake of the unfavourable decision, the company’s cash flow situation will get more challenging, according to Balaji Subramaniam, Vice President of IIFL Securities.

In addition, Subramaniam told CNBC-TV18 that considering Vodafone Idea’s lack of improvement, he believes Bharti Airtel may acquire more market share.

According to the vice president of IIFL Securities for Vodafone Idea, the company will now be closely watching to see if it can proceed with its plan to raise debt in light of the unfavourable Supreme Court decision. This debt fund raise is essential for the company to continue with its capital expenditure plans.

As per IIFL Securities, Bharti Airtel presently holds AGR dues around ₹36,000 crore.

At ₹10.96, Vodafone Idea shares are presently engaged in a 15% downward circuit. The shares has dropped below ₹11, the price of its follow-on public offer.
Released on September 19, 2024 at 11:41 AM IST

The Sensex and Nifty 50 hit all-time highs after the FOMC, led by Powell, dropped interest rates by 50 basis points.

Posted on by Btech Traders

Following a two-day meeting of the Federal Open Market Committee (FOMC), the US Federal Reserve announced its sixth policy decision for 2024 on September 18. The Fed cut the benchmark interest rate by 50 basis points (bps), or ½ of a percentage point, to 4.75 percent to 5 percent for the first time in four years, largely in line with Wall Street estimates.

 In order to reach a range of 2.75 percent to 3.00 percent, US Fed policymakers anticipate that the benchmark interest rate would drop by an additional half-point (50 bps) by the end of this year, another full percentage point in 2025, and a final half-point in 2026. One tenth (1/100) of a percentage point is equivalent to one bps.

From a peak of 9.1% in mid-2022 to a three-year low of 2.5% in August—just beyond the US Federal Reserve’s two percent target—US inflation has plummeted. US Federal Reserve officials have been concentrating on helping a contracting labour market and accomplishing a unique “soft landing,” which lowers inflation without precipitously slowing down the economy, as a result of inflation only marginally exceeding their goal level. 

The rate-setting panel headed by Fed Chair Jerome Powell unanimously decided to maintain the policy rate at the 23-year high, between 5.25 and 5.50 percent, at its previous meeting. In an effort to reduce inflation in the greatest economy in the world, the US central bank kept borrowing rates constant for a record 14 months running.

The central bank has kept the policy rate on hold since July 2023 in order to anchor in high inflation and steadily lower it towards the two percent target range. The central bank raised the rate by 5.25 percentage points since March 2022, one of the fastest Fed responses to counter the worst inflation outbreak in 40 years.