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Business and Finance News Highlights of the week transcript on 16 April 2023
Let’s begin. Allegations relating to predatory pricing have returned to the telecom sector after a gap of seven years, with Bharti Airtel levelling such charges against Reliance Jio on its recent bundled broadband plan offering live TV channels. While Jio has countered the claim, pure-play DTH operator Tata Play has accused both telecom operators of predatory pricing in their broadband plans offering live TV channels. All three companies have made submissions to Telecom Regulatory Authority of India, which is examining the matter. The core of the dispute is convergence between telecom and broadcasting services, which is not directly addressed by existing regulations. While there are tariff regulations for both telecom and broadcasting services, they do not tackle what happens if broadcasting services are offered by telecom players through their apps or data connectivity plans.
Speaking of Reliance Jio, their fully-owned subsidiary Reliance Projects will buy Rs 123.84 crore worth of optical fibre cables from HFCL Limited. In a regulatory filing, HFCL said, quote, “The Company along with its material subsidiary, HTL Limited, has received the Purchase Orders aggregating to ~Rs 123.84 crores from Reliance Projects & Property Management Services Limited for supply of Optical Fiber Cables to one of the leading Private Telecom Operators of the country,” unquote. The time period by which the order is to be executed is October 2023, according to the filing. Earlier last year, Reliance Industries chairman Mukesh Ambani had said that Jio’s pan-India fibre-optic network is more than 11 lakh kilometres in length which is long enough to go around Earth over 27 times.
On to market. Nestle India Ltd this week declared an interim dividend of Rs 27 per equity share of Rs 10 each for the calendar year 2023. Nestle has announced April 21 as the record date for determining the eligibility of shareholders for interim dividend payment. Nestle India in a stock exchange filing said, quote, “This is to inform you that the Board of Directors at their meeting held this week declared an interim dividend of Rs 27 per equity share of Rs 10 each for the year 2023 on the entire issued, subscribed and paid-up share capital of the Company of 9,64,15,716 equity shares of the nominal value of Rs 10 each,” unquote. This is Nestle’s first interim dividend for the year 2023, and will be paid on and from 8 May, along with the final dividend for the year 2022. Earlier, for the year 2022, Nestle issued a total dividend of Rs 220 per share.
Meanwhile, In a sign that interest rates may have peaked at the shorter end, HDFC Bank this week cut the marginal cost of funds-based lending rate by up to 85 basis points for loans of very short tenors. The private sector lender slashed its overnight MCLR by 85 bps to 7.80% while for the one-month tenor the rate was reduced by 70 bps to 7.95%. The rate for the 3-month loans was pruned by 40 bps to 8.30% and for 6-month loans by 10 bps to 8.70%. Rates for longer 1-year, 2-year and 3-year tenors were left unchanged at 8.95%, 9.05% and 9.15%, respectively. HDFC Bank had last increased its MCLR in March by 5 bps across loan tenures to between 8.65%-9.15% per annum. Some lenders, however, are, raising rates for tenors of one year while leaving rates for shorter tenors unchanged.
Moving on. In other news, Southwest monsoon rainfall during June-September is likely to be in the ‘normal’ range at 96% of the benchmark long-period average, the Indian Meteorological Department said this week. Rainfall between 96-104% of the LPA is considered ‘normal’. The official weather agency’s prediction comes as a relief to the farm sector, which relies on monsoon rainfall for crops grown in over a half of the net cultivated area. Key kharif crops like paddy, tur and soyabean are significantly rain-fed even now, though irrigation has improved significantly in the last two decades. The central and eastern parts of the country are more dependent on monsoon rains for crop cultivation. The IMD’s forecast comes close on the heels of private weather forecasting agency Skymet’s statement on Monday that monsoon precipitation this year could be ‘below normal’ at 94% of the LPA.
Lastly, Leading milk and milk products company Mother Dairy Fruit and Vegetable Pvt Ltd announced this week that it is gearing up to strengthen its value-added dairy play with plans to launch nearly 100 products in the next three years. Manish Bandlish, Managing Director at Mother Dairy Fruit & Vegetable Pvt Ltd said, quote, “In the next 3 years, we aim to introduce over 100 new products in order to reaffirm our position as one of the leading and consumer-centric dairy players in the industry; this year marks the beginning of this journey,” unquote.
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