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Shares of Debt-ridden telecom operator Vodafone Idea Ltd. rose as much as 7% in early trading on Monday after the company concluded a mega capex deal over the weekend.

Vodafone Idea informed the exchanges on Sunday that it has concluded a mega $3.6 billion or ₹30,000 crore deal with Nokia, Ericsson and Samsung, for the supply of network equipment over a period of three years.

Vodafone Idea has continued with its existing long-term partners Nokia and Ericsson and also onboarded Samsung as a new partner, the company said in a regulatory filing on September 22.

The deal marks the first step towards the rollout of the company’s transformative three-year capex plan of $6.6 billion (₹55,000 crore). The capex program is directed towards expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets and capacity expansion in line with data growth.

The company said the new equipment will lead to efficiency gains in energy and thus lower operating costs. The supplies against these new long-term awards will start in the coming quarter. The top priority for the company is to expand the 4G coverage to 1.2 billion Indians, it said.

Post the recent equity raise of ₹24,000 crore and additional spectrum acquisition of ₹3,500 crore in June 2024 auction, the company has also executed some quick win capex, while simultaneously working on concluding these long-term contracts.

These quick wins were mainly by way of deployment of more spectrum on existing sites and also the roll out of some new sites. This is resulting in 15% boost in capacity and an increase in population coverage by 1.6 crore by end September, 2024.

Vodafone Idea will also be holding an analyst call to brief them about the current situation on the AGR dues on Monday.

The senior management of Vodafone Idea, including CEO Akshaya Moondra and CFO Murthy GVAS along with other management personnel will be participating in the conference call between 2:30 PM to 3 PM on Monday.

The development comes after the apex court dismissed petitions from several telecom operators, including Vodafone Idea and Bharti Airtel, concerning the re-computation of Adjusted Gross Revenue (AGR) dues.

The judgement had permitted the Department of Telecommunications (DoT) to include all non-telecom revenue in calculations of AGR.

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

Shares of Vodafone Idea Ltd. are currently trading 7% higher at ₹11.2. The stock has declined over 35% so far in 2024.

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Shares of IIFL Finance rose 12% in early deals on Friday after the firm said the Reserve Bank of India(RBI) has lifted restrictions imposed on the company’s gold loan business. IIFL Finance stock surged 12.33% to Rs 555.25 against the previous close of Rs 494.30. Market cap of the firm climbed to Rs 22,972 crore.

In a year, the stock has fallen 3 per cent. Total 8.62 lakh shares changed hands amounting to a turnover of Rs 47.45 crore on BSE on Friday. 

In terms of technicals, the relative strength index (RSI) of IIFL Finance stands at 56.4, signaling it’s trading neither in the oversold nor in the overbought zone. IIFL Finance shares are trading higher than the 5 day, 10 day, 50 day, 100 day and 200 day moving averages. 

IIFL Finance stock has a one-year beta of 1.1, indicating high volatility during the period.

“RBI, through its communication dated September 19, 2024, has lifted the restrictions imposed on the gold loan business of the company. The RBI’s decision is effective immediately and allows the Company to resume the sanctioning, disbursal, assignment, securitisation, and sale of gold loans in compliance with all relevant laws and regulations,” said IIFL Finance in a stock exchange filing.

“The company is committed to upholding the highest standards of compliance and will continue to ensure that the remedial actions taken are sustained,” added IIFL Finance.

RBI had imposed the restrictions on March 4, 2024.

IIFL Finance is among the leading retail-focused diversified NBFCs in India, engaged in the business of loans and mortgages along with its subsidiaries – IIFL Home Finance and IIFL Samasta Finance.

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Shares of Anil Ambani’s Reliance Infrastructure (RIIL) gained following the board’s approval to raise Rs 3,014.4 crore through a preferential issue of up to 12.56 crore equity shares at an issue price of Rs 240 apiece.

The preferential issue will be made to promoter group entity Risee Infinity Private Limited and other non-promoter entities Florintree Innovation LLP, Fortune Financial & Equities Services Private Limited, the company said in a regulatory filing, adding that the issue will result in enhancing the promoter’s equity stake.

The issue will involve investments from former Blackstone executive Mathew Cyriac, participating through Florintree Innovation, and equity investor Nimish Shah, investing via Fortune Financial & Equities Services. Together, they will contribute Rs 1,200 crore for a minority stake in Reliance Infrastructure.

Anil Ambani, through Risee Infinity, which currently holds a 16 percent stake in the company, will invest the remaining Rs 1,814 crore.

Additionally, the RIIL board also greenlit seeking enabling authorisation from the shareholders to raise up to Rs 3,000 crore by making a Qualified Institutional Placement (QIP).

The proceeds from the QIP will be used for expansion of business operations directly and/or through investment in subsidiaries and joint ventures including meeting the long-term working capital requirements and for general corporate purposes, it said.

The company has significantly reduced its standalone external debt, bringing the amount down from Rs 3,831 crore to Rs 475 crore. Consequently, the Anil Ambani-led firm’s net worth stands at around Rs 9,041 crore. The issue will also give a boost to company’s net worth, rising from Rs 9,000 crore to Rs 12,000 crore, it said.

Reliance Infra shares closed marginally higher at Rs 282.80 on NSE in the previous session. The stock has rallied 33 percent so far this year, outperforming Nifty’s returns of 16 percent. In the past 12 months, the counter has risen 62 percent. In comparison, Nifty rose 27 percent during this period.

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For the first time since 202o, the US Federal Reserve cut down the benchmark interest rates by 50 basis points , bringing the target rate range to 4.75%-5%, from its previous scope of 5.25% to 5.5%. The decision, which was taken 11:1, was not unanimous, a striking departure from all other unanimous interest rate decisions taken by Fed over the last 2 years.

Per chairman Jerome Powell, the decision was taken in light of easing inflationary pressures in the US economy, which came down to 2.53% this month, as opposed to 2.89% a month prior, and 3.67% last year.

“In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective”, the FOMC committee highlighted in its statement.

Signaling more aggressive rate cuts going ahead, Fed projections implied an additional 50 bps rate cut from current levels within 2024, with rate trims going as high as 100 bps in 2025, and another 50 bps in 2026. Notably, last month, Powell had strongly hinted towards a rate cut, saying it was “time for policy to be adjusted”.

Over the last few years, high interest rates had made home equity loans and credit card interest rates super expensive. In March 2022, which was the first time Fed hiked interest, rates on home equity loans stood at 5.96%%. This has jumped to 8.49% in September 2o24. At 20.78%, credit card interest rates have also been sky-high, swelling by over 400 basis points since March 2022.

Indian markets stay flat
On Wednesday, Indian equity markets maintained a cautious outlook, with BSE Sensex and Nifty50 dipping by 0.16% each to close the day in red. During the day, both Sensex and Nifty scaled record highs of 83,326.38 points, and 25.377.55 points respectively.

Most market experts anticipated a 25-bps rate cut, but with Fed delivering a mammoth-size cut, the focus is now set to shift from inflation to unemployment, with the rate cut offering much-needed, immediate relief to US economy, which has, for long, been battling high borrowing costs. Per Fed officials, unemployment is set to rise to 4.4% this year, up from its present rate of 4.2%, as recorded in August.

Per Bloomberg reports, shortly after the announcement, gold prices also jumped to record highs. The prices of yellow metal were already hovering near all-time highs ahead of the announcement. A rate cut pushes to weaken the greenback, which is what gold is priced in internationally. This makes bullion cheaper, pushing up its demand globally.

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Shares of the state-run utility major NTPC in Thursday’s session (September 19)  rallied steeply after the company’s renewable subsidiary NTPC Green Energy has filed DRHP for a Rs 10,000 crore public issue. The entire issue will be a fresh share sale. 

The stock scaled a new life-time high of Rs 431.85 per share after gaining over 4 per cent.

The country’s leading power generating company- NTPC filed IPO papers for its green energy arm- NTPC Green Energy (NGE). Through the issue, the state-run Maharatna aims to raise around $1.2 billion or Rs 10,000 crore. 

NTPC in the last one year has delivered a decent return of over 77 per cent.

How global brokerages view NTPC stock?

Global brokerage Jefferies maintained its buy call on the stock with a target price of Rs 485, implying over 17 per cent gains from the previous close. The brokerage believes the company is moving towards Its 60 GW 2032 RE target and has 24 GW pipeline in place. The brokerage notes that RE capacity ramp-up together with pilot project on green hydrogen will remain key re-rating triggers.

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