}

Thursday, 21 June 2018

21 June 2018 - Views & News


TOP NEWS

Cipla: Company receives USFDA approval for Testosterone Cypionate injection (male hormone replacement therapy drug) – Positive for Cipla; We have a buy recommendation on the stock with PT of Rs665; Cipla is one of our preferred pick.

Indian Hotels Company: The company won the bid for a 85 rooms hotel located in Connaught place, Delhi; IHCL will pay 31.8% of gross revenues or Rs5.89crore per annum as a fee – positive read through for IHCL as Taj Mansingh is likely to get auctioned in the coming months

Gayatri Projects: The UP Government has cancelled the earlier bid of Rs1,111 crore on the Purvanchal Expressway Project and has re-invited the bids. Gayatri Projects was declared as L1 (Lowest) bidder for Package VI of the said project on an EPC basis, which now stands cancelled. Negative read thru for Gayatri Projects

OTHER NEWS

BHEL: bags two orders totaling to Rs 1,000 crores orders for emission control equipment, involving supply and installation of flue gas desulphurization (FGD) systems for control of SOx emissions, from Telangana State Power Generation Corporation for its 1x800 MW Kothagudem thermal power station (TPS) and 4x270 MW Bhadradri TPS in Telangana; Positive

Mahindra Lifespace Developers: International Finance Corporation shall invest upto Rs 200 crore in Mahindra Lifespace Developers’ Jaipur Project. Positive read thru for Mahindra Lifespace Developers

InterGlobe Aviation: clarified that it has not received summons from the Enforcement Directorate for FEMA violation as against news being telecast on various news channels stating ‘ED summons top management of Indigo Airlines for FEMA violation’. Positive read thru for Interglobe Aviation.

Emami, HUL: Emami has secured an ad-interim order from a Hooghly district court restraining Hindustan Unilever Ltd (HUL) and seven broadcasters from airing HUL’s new television campaign on Men's Fair and Lovely fairness cream – sentimentally positive for Emami; neutral for HUL

M&M: launches TUV3OO Plus, which is a 9 seater variant of its existing vehicle - TUV3OO. The vehicle is powered by 2.2 litre (120 HP) diesel engine mated with a 6-speed manual transmission. The TUV3OO plus is priced at Rs 9.59 lakh (ex-Showroom Delhi). the variant would appeal to customers looking for more space and power. TUV300 Plus comes with various features including micro hybrid technology and cushion suspension technology.  Positive read thru

Eicher Motors: VECV To launch new products to regain market share in LMD; launches 2 new CNG variants of its Eicher Pro 1000 series truck in the LCV segment in the Delhi and NCR region – Positive read thru
VE Commercial Vehicles Ltd (VECV), an equal joint venture between Eicher Motors and Volvo Group of Sweden, is charting aggressive plans to regain its share in the light and medium commercial vehicle segment. It has planned an interesting portfolio of products to be launched starting next month. As per the company, The new product will offer higher speed and turnaround time along with other features. Also, The company has launched the CNG version of Eicher Pro 1049 in the light and medium range and Eicher Pro 1059 truck in the 5-ton LCV category. The two CNG trucks have been introduced in Delhi, Haryana and UP markets and will be available across India in various cargo body option right from 10ft to 14ft. These new trucks powered by CNG fuel is is expected to give 40% more fuel efficiency over diesel-powered trucks.

Axiscades: signed joint venture pact with Assystem in energy, buildings, infrastructures and nuclear sectors – positive read-thru

This JV company will undertake engineering services for energy sector business for Indian and global utilities and contractors. The JV will start its operations in Hyderabad and plans to open two more centers in Delhi and in Mumbai with proximity to key customers. The JV plans to employ over 500 talented engineers in the next three years.

 IDBI Bank: The government has given B Sriram, the current SBI managing director, an additional charge of IDBI Bank's managing director for three months – Neutral read thru


Bosch: eyes Rs 1,700-cr investment in IoT and AI over the next 3 years; positive 
Bosch will invest Rs 1,700 crore in the next three years in India as it hedges its opportunities in both electric, diesel vehicles and also transitions into a technology company by focussing on Internet of Things (IoT) and Artificial Intelligence (AI). Bosch is now betting on shifting its focus on technologies like AI and IoT as it sees the consumer shift towards that direction. In line with this change, the Adugodi plant in Bengaluru is being revamped from a manufacturing facility into a technology hub with investments of Rs 370 crore. Simultaneously, Bosch set up an AI centre in Bengaluru, and a Connected Mobility Solutions division in India too, with an intent to shape the mobility of the future from a technology and standards perspective.

 Bank of Maharashtra:  CEO and  executive director booked for role in Rs 3,000 crore DSK Group default case – Negative read thru

 Bayer,Monsanto: Bayer-Monsanto takeover approved by Competition Commission of India, Bayer  & Monsanto products complement each other as Bayer CropScience products were more so in agro chemicals and Monsanto products in seed, the combined entity is expected to obtain administrative synergies in addition to increase in volumes sales due to cross selling – sentimentally positive for both the stock.

 Majesco: selected by NTUC Income (Singapore insurance company) for distributing solutions – positive
Majesco announced that NTUC Income has selected the Majesco Distribution Management and Majesco Digital Solutions to optimize management of its sales and distribution channels across the insurance business.

Wednesday, 20 June 2018

20 June 2018 - Views & News

BUSINESS NEWS HEADLINES


Business Standard

 'India has potential to become $10 tn economy by 2030'
Govt open to giving more powers to RBI: FM Goyal
Government eases import of used machinery
India sees 20% rise in $ millionaires, despite GST
Public money extremely safe in PSBs: Goyal 
Centre saved Rs 90,000 cr through digital transfer: Kant
Government puts off Air India stake sale for now
CAD at 2.5% of GDP not a worry, govt geared to deal with outlows: FinMin
Kharif sowing down by 75% in Gujarat due to chronic water shortage
Cotton blooms as US-triggered trade war intensifies, yarn prices up 10%
Infra, realty firms face refinancing test of Rs 3-4 trillion: Ind-Ra
Maharashtra govt's move to ban use of plastic puts RIL in recycle mode

Mint

Zydus Cadila gets USFDA nod for erectile dysfunction drug
Centre sets 30 GW target for offshore wind power by 2030
Rubber imports: Planters decry easier port entry norms
Cipla gets USFDA nod for generic HIV drug
RCom arm GCX completes India data centre for Eagle Subsea Network
Infosys to set up data marketplace for enterprises
Rupee closes at 1-month low against US dollar
Tata Steel-Thyssenkrupp merger to cut costs: Moody’s
Bangladesh’s bulk drugs policy may hurt Indian exports
3 foreign investors trim shareholdings in ICICI Bank amid governance concerns
Narendra Modi govt planning National Electricity Distribution Company

Financial Chronicle

Bankers chalk out strategy to promote lending to corporates, MSME, says Piyush Goyal
Hotel industry’s recovery trend to continue till FY22: Icra
Patanjali gets UP’s nod to give land to subsidiary firm to set up food park
Internet now has 333.8 million domain names
SBI bats for consolidation of other PSBs
RBI revises up housing loan limits under priority sector
Varroc sets IPO price band at Rs 965-967 for Rs 1 shares
Fund outflows relentless; rupee may touch 70-level by year-end

TOP NEWS

Housing Finance: RBI has revises housing loan limits under priority sector – Positive for HFCs
RBI has upwardly revised housing loan limits for eligibility under priority sector lending to Rs 35 lakh in metropolitan centres, and Rs 25 lakh in other centres from earlier limits of Rs28 Lakh and 20 Lakh respectively. The existing family income limit of Rs 2 lakh per annum for loans to housing projects for Economically Weaker Sections (EWS) and Low Income Groups (LIG) stands revised to Rs 3 lakh per annum and Rs 6 lakh per annum, respectively. This we believe is a positive as more people would be eligible, and housing loans financiers could offer better rates which in-turn could increase credit demand in this segment.

Cipla: received final approval for its ANDA for Efavirenz Tablets 600mg from USFDA. Used in for the treatment of human immunodeficiency virus type 1 infection in adults and in pediatric patients at least 3 months old and weighing at least 3.5 kg. Positive for Stock

Kansai Nerolac Paints: Has agreed to acquire 55% equity stake in Bangladesh-headquartered RAK Paints Ltd for Rs 45.81 crore in a cash deal (valued at 0.7x price to sales). The aim is to establish competitive business model in emerging markets such as Bangladesh with strong presence in decorative and automotive paints segment – positive read through for Kansai.

M&M: Aims to regain leadership in domestic UV space with new launches; to boost farm equipment exports; positive read thru….(details in other news)

UPL: UPL-led consortium (sovereign wealth fund Abu Dhabi Investment Authority and other investors) is in exclusive talks to acquire Bill Ackman-backed Platform Specialty Products Corp (business known as Arysta LifeScience) – Positive read through for the stock

Jubilant FoodWorks, Emami: Shares of Emami and Jubilant FoodWorks will turn ex-bonus on Thursday. Both the companies are rewarding their shareholders with a 1:1 bonus issue.

OTHER NEWS

Capital First: Plans to acquire a 14.24% stake in DigiKredit Finance Pvt. Ltd for Rs 12 crore , through its digital lending platform SMEcorner, offers access to business loans for micro, small and medium enterprises – positive read thru

TCS: NCR Corp. and TCS entered into a strategic alliance – positive read-thru
This alliance will bring together the consulting-led IT expertise of TCS with NCR’s industry expertise and solutions to deliver end-to-end consumer engagement, channel transformation and digital enablement outcomes for targeted customers in the banking, retail and hospitality industries.

M&M: Aims to regain leadership in domestic UV space with new launches; to boost farm equipment exports; positive read thru
M&M intends to regain its number one position in the UV market through new product launches. M&M will launch three new products and is focussing on volume growth. M&M market share in UV has dropped from 29.2% in FY2017 to 23.5% in May 2018 due to lack of new launches and intensifying competition. M&M also aims to ramp up farm equipment exports with focus on Europe, China, Africa and South America M&M would  invest around Rs 15,000 crore in next three years, of which capex is Rs 10,000 crore. Further M&M aims to invest Rs 5,000 crore out of which some would be in its subsidiaries and some would be for acquisitions. 

Eicher Motors: Volvo Eicher JV plans to widen its CNG run medium duty truck range; to launch a 14 ton truck in September ending quarter – Positive read thru
Volvo Eicher Motors JV (VECV) plans to widen its range of medium-duty trucks that run on compressed natural gas (CNG). VECV will launch a CNG truck with a gross vehicle weight  up to 14 ton in  quarter ending September 2018. Also the company has showcased its 4.9 and 5.9 ton CNG vehicles used for last mile connectivity and gradually plans to upgrade to high ton segment as well. The product expansion in the CNG segment comes on the back of increasing footprint of CNG stations predominantly in New Delhi and NCR  and in parts of Punjab and Uttar Pradesh. Currently, CNG run vehicles account for around 20% of the North India sales for VECV and with the imposition of the green tax, the company looks towards CNG trucks to drive the sales

DCM Shriram: to buyback 55.55 lakh equity shares at a price not exceeding Rs 450 each (51% higher than the CMP of Rs 297) from the open market – Sentimentally positive for the stock

Aarti Industries: has incorporated a Wholly Owned Subsidiary (W05) namely, ”Arti Surfactants limited", however the WOS is yet to commence operations.

Tuesday, 19 June 2018

19 June 2018 - Views & News

BUSINESS NEWS HEADLINES

Business Standard
.
Chanda goes on leave, ICICI puts Bakhshi in charge of operations
IOC in talks with US cos for term deals to buy 1MT oil
Led by pvt sec lenders, bank credit up 3.4% in Dec qtr
London & other cities call for new petrol car ban
Discom losses down 70% to Rs 17K cr, says report
Vectus Industries files for Rs 500 cr IPO with Sebi
Govt to subsidise finance and insurance cost for sugar buffer stock
EPFO proposes move to ban full withdrawal of PF savings
Arun Jaitley hints no cut in excise on oil, asks citizens to pay taxes
Lupin, Nichi-Iko to commercialise arthritis biosimilar in Japan
Piramal to back Chennai-based Appaswamy group, sanctions Rs 2 bn facility

Mint

Need to increase tax-GDP ratio by 1.5% points: Jaitley
Automakers’ capex pegged at Rs 58,000 cr for next two years: Crisil
NCLT grants additional 20 days for Adhunik Metaliks to complete insolvency resolution process
AU Small Finance Bank to raise ₹1000 crore from Temasek
Recharging Eveready: Company seeks to halve debt by selling land 
ED wants ‘fugitive’ tag for Vijay Mallya
RBI wants banks to discipline Indian corporates on working capital
TCS share buyback shows absurdities of India’s repurchase rules
HDFC Bank may rely on Indian market for $2.3 billion share sale
Distressed asset funds eye buyout deals ahead of bankruptcy process

Financial Chronicle

GST formalising economy, widening tax base, says Finance Ministry
TCS sets up new delivery centre in Paris that can accommodate up to 230 employees
Retail-focused NBFCs may need up to Rs 4 trillion fresh debt to grow at 20% in FY19: Report
Irdai sets up panel to review norms for insurance marketing firms
Govt to list RVNL, IRFC in Q2
RBI proposals on large loans to improve fund management: SBI
Indians face 25% higher risks to financial fraud
Brokerages seek tax incentives for offshore trades
Gujarat NRE may get a new lease of life


TOP NEWS

ICICI Bank: ICICI Bank Board has appointed Sandeep Bakhshi, who is currently MD and CEO of ICICI Prudential Life, its life insurance subsidiary, as Wholetime Director and COO for 5 years period, and has sent its Managing Director and CEO Chanda Kochhar on leave till an independent probe completed – The remedial measure from ICICI bank amidst negative news flows seems to be sentimentally positive, the stock has already reacted positively in trade yesterday , post this development reported by media. We also expect this development to have positive rub off effect on ICICI Prudential life stock.

Ashok Leyland: Subsidiary Hinduja Leyland Finance Ltd has filed a DRHP with SEBI for its proposed IPO on June 14, 2018. Ashok Leyland currently holds 57.2% stake in the company. The shareholders are considering a pre offer placement of upto 1 cr equity shares for an amount not exceeding Rs 200 cr (seeking valuation of Rs 8,240 cr for the entire company). The listing of the subsidiary would provide value unlocking opportunity for Ashok Leyland. Positive read-thru

Axis Bank: As per media news, Axis Bank is considering P S Jaykumar (CEO of Bank of Baroda) as a successor for current Axis Bank’s CEO – Stock to be in Focus

OTHER NEWS

Godrej Consumer Products: entered into herbal powder hair colour category through launch of Godrej Nupur Natural Henna powder – positive read through for the stock
In-line with its strategic objective of increasing penetration in Hair Colours category, Godrej Consumer Products (GCPL) forayed in Herbal Based Powder Hair Colours with launch of ‘Godrej Nupur Natural Henna Based Hair Colour’. The overall size of herbal based market in India is around Rs1,000 (25% of overall hair colour market in India). With focus on consumer recruitment the company has launched the product at affordable price point of Rs10. This is in-line with company’s strategy of driving growth through new products launches in key market. We maintain GCPL as one of our top picks in the FMCG space.

Ultratech Cement, Dalmia Bharat, Binani Industries: NCLT Kolkata reserved its judgment to accept or reject Ultratech’s resolution plan for Binani Cement until July 9 as per media reports. The SC is also scheduled to hear a plea by Dalmia Bharat on July 2. Stocks to remain in focus

HDFC Bank: Mulls to raise $2.3 billion entirely from Indian Markets – Neutral Read thru

Titan: Sells electronics manufacturing unit [Titan Timeproducts Ltd (TTPL)] to Danlaw Technologies for Rs 18.5 crore – neutral read through for Titan

Gayatri Projects: CARE ratings has upgraded its credit ratings for bank facilities from D to BB- with a stable outlook. Positive read thru for Gayatri Projects.

Power Sector: Centre plans to set up national discom
The Union government plans to set up a national power distribution company that will handhold state discoms in electricity distribution activities and ensure time-bound implementation of central schemes. The proposed company will compete with private firms and contractors to bag contracts of state-run distribution companies for appointing franchisees or engineering tenders. Apart from small distribution consultancy wings in Rural Electrification Corporation, Power Grid Corporation and NTPC, the central government has no presence in electricity distribution sector. The proposed company may or may not obtain a distribution licence and it will not interfere in the working of state power distribution companies given the federal structure.  

Inox Leisure: approves scheme of merger of Swanston Multiplex Cinemas with company – stock to remain in focus

Monday, 18 June 2018

18 June 2018 - Views & News

BUSINESS NEWS HEADLINES

Business Standard

Oil companies plan to add 25,000 petrol pumps
NMDC, Karnataka steelmakers clash over iron ore rates
Aircel, RCom yet to clear dues, allege distributors
Walmart deal will be cancerous to retail trade: CAIT
Excise duty cut on oil to impact fiscal health: Moody's
BBB suggests 22 GMs to appoint as EDs at PSBs
States' fiscal deficit steeply falls by 25% in FY18
Every Re 1 cut in excise duty on fuel to cost govt Rs 130 bn, says Moody's
DoT may clear Voda-Idea merger tomorrow; seeks Rs 21 bn bank guarantee
NABARD to lend Rs 210 bn to Madhya Pradesh in current fiscal year
Depositories share companies' information with exchanges on FDI limits
Air India's listing hits roadblock after SEBI refuses to relax norms

Mint

US pips India as top greenfield FDI investment destination: Report
PM says challenge now is to achieve double-digit economic growth rate
ED set to soon file charge-sheet against Mallya in Rs 6,027-cr loan repayment case
NHB directs housing finance cos to comply with IND-AS provisions
The strange case of dip in scooter sales after 15 months of growth
Sebi plans to revise share buy-back regulations
5G rollout in India: Panel bats for early release of spectrum for R&D
Dues of Punjab National Bank’s big wilful defaulters rise to Rs15,490 crore
Lupin expects single digit sales growth in 2018-19
Large builders eye township projects as small firms exit
Reliance Industries investing in India’s first carbon fibre unit

Financial Chronicle

India has trade deficit with 10 RCEP members
Kerala government to leverage Blockchain technology to streamline supply network
Number of office leasing deals up 56% in last 5 years; average size down 10%
ONGC sells CBM gas at $5.77-6.12 per MMBtu
Temporary restraining order for Dr Reddy’s
States collect Rs 10K cr taxes online post e-gov initiatives
Nifty EPS will grow 17% in FY19 & FY20
Rubber MSMEs demand review of dumping duty
Number of office leasing deals up 56% in last 5 years
Borosil to raise solar glass production to meet rising demand

TOP NEWS

Dr Reddy: US court restrains Dr Reddy’s from selling generic variant of Suboxone; The court has scheduled an expedited hearing of the preliminary injection for Thursday (June 28) and a ruling is expected soon after;  – Negative read-thru

Bajaj Electricals: Acquires non-stick cookware company Nirlep Appliances for a cash consideration of Rs 42.5 crores; Positive…..(details in other news)
NBCC: Submitted bid in response to the invitation by Department of investment and Public Asset Management (DIPAM), Government of India for strategic disinvestment of HSCC Ltd and Engineering Projects (India) Limited (EPIL). NBCC plans to acquire these companies with an investment of Rs500crores- stock to be in focus

OTHER NEWS

Thomas Cook (India): Sterling Holiday Resorts to add up to 1,000 rooms by March 2020 across 16 resorts in India. The hospitality company currently has around 2,400 rooms across 33 resorts – positive read through for TCIL as Sterling Holiday is a subsidiary of the company.

Hindustan Unilever (HUL): HUL has teamed up with Amazon India to market a beard grooming range under the Brylcreem brand. The range will include products such as beard oil, beard wash, balm, hair cream and gels – positive read through for HUL as male grooming segment is seeing a lot of impetus. However, the entry of HUL is sentimentally negative for Marico and Emami who have been in male grooming segment since long, but HUL being the largest FMCG player, could impact sales for Marico and Emami.

Bajaj Electricals:Acquires non-stick cookware company Nirlep Appliances for a cash consideration of Rs 42.5 crores; Positive
Bajaj Electricals has entered into an agreement with non-stick cookware company Nirlep Appliances (FY'18 revenue Rs 47 crores) to acquire 100% stake in it for a cash consideration of Rs 42.5 crores. The acquisition will give the company an "exclusive access" to Nirlep brand, its manufacturing facility in western India, employees, distribution network, intellectual property rights & goodwill. The acquisition will provide Bajaj with a strong foothold in the non-electrical kitchen category as well as a complementary product portfolio in the fast growing Rs 120bn kitchenware category together with its strong presence in the electrical kitchen appliances

Oil and Natural Gas Corporation (ONGC): Has sold natural gas from its three coal bed methane (CBM) blocks in Jharkhand at price ranging between $5.77/mmbtu to $6.12/mmbtu (almost double the price of $3.06/mmbtu for domestic gas produced from conventional sources). ONGC is likely to start gas production from its three CBM blocks in Jharkhand by next month with peak production of 3mmscmd - marginally positive for ONGC given small size of gas production from CBM blocks.

PNC Infratech: The UP government has re-invited bids for Purvanchal Expressway. The company had earlier informed on May 24, 2018 that it was declared as L1 (lowest) bidder for the 4th package of the Purvanchal Expressway Project on EPC basis for a quoted price of Rs. 1738.44 crore, which now stands cancelled. Negative read thru for the stock.

Idea Cellular, Grasim Industries: The telecom department is likely to conditional approval to the merger of Vodafone India and Idea Cellular today as per media reports. The telecom department will seek bank guarantee of Rs2100 crore as one time spectrum charge to be paid immediately by Idea, and undertakings to pay dues to be paid in the future, including deferred payments. Positive read thru for Idea Cellular and Grasim Industries (holding company of Idea).

Kanoria Chemicals and Industries: to set up Formaldehyde plant with 1 lakh tonne per annum in Andhra Pradesh – Positive read through for the stock.

INOX Leisure: Commencement of commercial operations of multiplex cinema theatre taken on lease basis located at Cuttack, it has 4 screens and 830 seats – positive read-thru

Friday, 15 June 2018

15 June 2018 - Views & News

BUSINESS NEWS HEADLINES

Business Standard

India may seek exemptions from US to buy Iranian Oil
Govt Rs 2.1K cr guarantee to clear merger: DoT to Idea
India may begin Nirav's extradition process in UK
Adani Wilmer decides not to revise bid for Ruchi Soya
ICICI Bank invokes insolvency code against Punj Lloyd
Pvt sector banks to wean away share from PSBs: Kotak
Govt to help Air India with liquidity: Jayant Sinha
Steel units seek easier norms for expeditious auction of mineral blocks
Seafood exports may hit all-time high of $6 bn on strong volumes: MPEDA
Karnataka iron ore offtake falls sharply, only 25% of NMDC's output sold
Fortis Healthcare scraps Fortis Malar Hospitals, SRL merger scheme
Aircel, two sister entities under SFIO lens for financial irregularities

Mint

UK car industry faces threat of post-Brexit ‘extinction’
Wholesale inflation jumps to 14-month high of 4.43% on dearer fuel, vegetables
Alembic Pharma gets USFDA nod for antibiotic drug
Gadkari to meet banks to sort out issues of fund flow to road projects
Sebi plans revised norms to recover investors’ money
Fine Organic to launch Rs600 crore IPO on 20 June
Govt presses on with plan to sell IDBI Bank stake
Advertising spend will grow 10.5% to Rs.62,400 crore in 2018: Dentsu
NSE looking to ease start-up listing norms

Financial Chronicle

Maharashtra electricity regulator MERC reserves order on Rs 18,000 crore R Infra-Adani deal
Marg ERP expects 50% business growth in Fy19
PM Narendra Modi dedicates SAIL’s upgraded Bhilai Steel Plant to the nation
Public Wi-Fi networks without licence violate law, says COAI
India expects growth in G&J exports as China slashes tariffs by 65%
Just 1% growth in premium for pvt insurers in Apr-May
Only 32% Indians make financial transactions online

TOP NEWS

Dr Reddy: Company has received USFDA approval for gSuboxone (used to treat adults with opioid dependence/addiction) and has decided to launch it in the US at risk (meaning selling the drug at the risk of losing an ongoing litigation) – Stock to remain in focus; Market size for the drug is ~ $1.8 billion; Mylan is another player with approval for the product and competition will increase, but if an AG (Authorised Generic) is approved it will be big negative; Also Dr Reddy will have to pay 3-4x damages if they lose the litigation.

Branded Apparel and Retail industry: Patanjali is going to come up with its apparel brand ‘Paridhan’ by the end of this year - sentimentally negative read through for all the branded apparel and retail companies like Arvind, Raymond, ABFRL, KKCL which would face intense competition from Patanjali as seen in the FMCG sector in the recent past… (details in other news)

Ceat: Raises capex guidance for FY2019-2020 period on capacity enhancement; to result in higher depreciation and interest expenses in near term; negative read thru

Bayer CropScience, Monsanto India: Bayer CropScience to explore Monsanto merger post completion of the open offer and the stake of Bayer will remain 75% even after completion of the open offer, as Bayer AG will dilute its stake to bring it down to 75% if the combined stake of Bayer entities exceed 75%. The precursor to the Monsanto India acquisition by Bayer CropScience is that Monsanto India will have to divest its stake in the joint venture MAHYCO wherein Monsanto India holds 26% stake. Bayer CropScience and Monsanto India products complement each other, hence the merge entity will surely stand to benefit but will take slightly longer time due to regulatory approvals – Both the stocks to remain in focus as merger ratio yet not announced.

SEBI considering to liberalise rules for starting Stock Exchanges and depositories; negative read-through for BSE, MCX & CDSL as competition will increase  
As per media reports, SEBI is considering to liberalise rules for starting stock exchanges and depositiories and likely to remove shareholding cap for setting up stock exchanges and other market infrastructure intermediaries such as depositories.

 OTHER NEWS

Branded Apparel and Retail industry: Patanjali is going to come up with its apparel brand ‘Paridhan’ by the end of this year. Apparels would be manufactured by third parties and the textile portfolio would have around 3,000 products including kidswear, yoga wear, sportswear, caps, shoes, towels, bedsheets and accessories. Patanjali would open 100 exclusive stores in metros as well as non-metros. However, the most awaited item from the company is its ‘swadeshi jeans’ which the company says it has adapted to Indian conditions – sentimentally negative read through for all the branded apparel and retail companies like Arvind, Raymond, ABFRL, KKCL which would face intense competition from Patanjali as seen in the FMCG sector in the recent past.

FMCG: Government has increased the import duty on crude and refined soft edible oils such as soy oil, sunflower oil and rapeseed; Duty on crude soft edible oils has been hiked to 35 per cent and on and soft oils to 45 per cent – negative for branded edible oil companies such as Marico, Agrotech Foods and Ruchi Soya

Beverage Industry: Coca-Cola is bringing in its acquired juice brand Rani to India to tap in the juice and juice drinks market which are growing two-times faster than carbonated drinks, with consumers increasingly moving away from sugary drinks, reflecting global trends – sentimentally negative read through for PepsiCo (also Varun Beverages as it manufactures and distributes ~51% volume of PepsiCo’s Indian business), Dabur as this would lead to rise in competition in the beverages industry

Maruti Suzuki: Discontinues the production of diesel variant of Ignis, its premium hatchback on account of a low demand. Neutral read thru as Maruti has waiting period on other models (viz Baleno, Swift, Brezza and Dzire) and the Ignis capacity would be available to reduce order backlog on these models.

Ceat: Raises capex guidance for FY2019-2020 period on capacity enhancement; to result in higher depreciation and interest expenses in near term; negative read thru
In recent interaction, the management has guided for increased capex over the next two years (about Rs 2,700-Rs 2,800 cr in FY2019-2020) as against our assumption of Rs 2,150 cr). The capex is higher than Rs (1,050 cr incurred in FY2016-2018) and would be directed towards capacity expansion across categories viz PV, CV and 2W and debottlenecking at current plants. Company has guided for a healthy double digit growth due to increased OEM penetration and new capacity addition. While the growth would be robust, higher capex would increase the debt levels leading to higher depreciation and interest expenses in near term. We retain Neutral rating on the stock. 

Container Corporation of India has fixed 27th June 2018 as record date for determining shareholders entitlement for sub-division of equity shares of one equity share of face value of Rs10 each into two equity shares of face value Rs5 each.

Wipro: Wins cargo management contract from LATAM Cargo; Nokia selects Wipro to accelerate Its supply chain digital transformation – positive read-thru

Idea: DoT seeks Rs 2,100 crore bank guarantee from Idea to clear Vodafone merger deal – stock to remain in focus
As per media news, the DoT will seek a bank guarantee of around Rs 2,100 crore for clearing Idea Cellular planned merger with Vodafone India. The amount pertains to one time spectrum fee of Idea Cellular.

Road sector: The transport minister Nitin Gadkari said he will soon meet top bankers to resolve the issue of drying up of funds from banks for construction of highways. The minister also said that due to rising cost of sand and its unavailability in several areas, he has instructed his officials to tell the contractors that they can construct bitumen road and reduce project cost by 30%. Positive read thru for the sector comprising companies like IRB Infrastructure, KNR Construction, Gayatri Projects, Ashoka Buildcon, Sadbhav Engineering among others.

Punj Lloyd: ICICI has filed an application before the NCLT under Sec 7 of the IBC. In a meeting of the Lenders of the Company held on 13th June 2018 more than 90% of the Lenders have, agreed to support a Resolution Plan under the Leadership of SBI for restructuring the o/s debts of the Company & decided that SBI on behalf of all Lenders shall oppose ICICI application at NCLT. The NCLT has directed the Company & SBI to file the necessary reply and has fixed hearing for 24th July 2018.

ICICI Bank: Mulls exercising oversubscription option to sell additional 1.43 crore shares in ICICI Prudential Life – Neutral read thru

Axis Bank: GST body alleges Rs 9.72 cr tax evasion at Axis Bank – negative read thru