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MOSL: Morning India (17/February/20): 1. Telecom (SC dismisses modification plea on AGR liability); 2. Technology; 3. Financials; 4. ONGC; 5. BPCL; 6. Shree Cement; 7. Muthoot Finance; 8. SAIL

Morning India (17/February/20):

Today’s top research idea
Telecom: SC dismisses modification plea on AGR liability
** The SC rejected the modification plea on AGR liability by telcos, compelling the DoT to raise demand notice. Total AGR liability on telcos stands at INR1,470b, of which Bharti/VIL need to pay INR340b/INR440b.

** This could have far-reaching serious ramifications on the telecom and banking sectors with ripple effects on the overall economy, as VIL faces a risk of shutdown with largescale debt default (INR1t), job losses and subscriber churn/annoyance. Ironically, the government, despite winning the suit, could see the biggest impact through deferred spectrum debt default INR900b.

** Bharti though appears well placed with its recent fund raise. A duopoly market will likely benefit it (along with RJio) with incremental EBITDA potential of INR100b in FY22 even after building in network cost increase with blue-sky EBITDA of ~INR550b (pre-Ind-AS 116).

 Piping hot news
Plans redrawn to end city gas distributors’ monopoly
The downstream regulator is planning to end marketing monopoly of Indraprastha Gas, Mahanagar Gas, Gail Gas, Gujarat Gas and more city gas distributors in at least 30 license areas by declaring their network as ‘common carrier', which would force them to reserve a part of their capacity for third party, people familiar with the matter said. In the next few months, the Petroleum and Natural Gas Regulatory Board (PNGRB) will likely be ready with a regulatory framework for elimination of monopolies, they said.