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Research Periodic Report Ambuja Cements’ Major Acquisition, Vodafone Idea’s Fundraising, Tata Consumer Products’ Expansion, and LIC’s Growth Plans

Ambuja Cements’ Major Acquisition, Vodafone Idea’s Fundraising, Tata Consumer Products’ Expansion, and LIC’s Growth Plans

Written by - Fisdom Research

June 14, 2024 4 minutes

Opening Bell:             

Gift Nifty is up by 5.5 points in the early morning trade, indicating a positive opening for Indian stock market                              

Asian markets exhibited mixed performance on Friday as investors awaited the Bank of Japan’s interest rate decision. Japan’s Nikkei 225 dipped by 0.09%, while the Topix remained relatively flat with a slight negative tilt. South Korea’s Kospi saw a modest increase of 0.14%, whereas the Kosdaq fell by 0.36%. Futures for Hong Kong’s Hang Seng index suggested a lower opening.         

The US stock market closed mixed on Thursday, with the S&P 500 and Nasdaq achieving record highs for the fourth consecutive session, driven by a surge in technology stocks. The Dow Jones Industrial Average fell by 65.11 points, or 0.17%, to 38,647.1, while the S&P 500 gained 12.71 points, or 0.23%, to 5,433.74. The Nasdaq Composite increased by 59.12 points, or 0.34%, finishing at 17,667.56.

Stocks News:

👉 Ambuja Cements: The company, owned by Adani Group, announced on June 13 that it will acquire a 100% stake in Penna Cement Industries Ltd (PCIL) for an enterprise value of ₹10,422 crore. The acquisition, expected to be completed within 3-4 months, is part of Adani’s goal to achieve a capacity of 140 million tonne per annum (MTPA) by 2028. The acquisition will be funded through internal accruals and will help Ambuja expand its market presence in South India.

👉 Vodafone Idea: On June 13, Vodafone Idea announced that its board has approved the issuance of about 166 crore shares at ₹14.80 per share to raise funds up to ₹2,458 crore on a preferential basis. The shares will be allotted to Nokia Solutions and Networks India Private Limited and Ericsson India Private Limited. Post this issuance, the shareholding of Nokia and Ericsson in Vodafone Idea will be 1.5% and 0.9%, respectively.

👉 Tata Consumer Products: TCPL plans to double its capital expenditure (capex) this fiscal year, with a significant portion of the investment going towards setting up a new plant in Vietnam. The company’s capex for the last fiscal year was around ₹308 crore, but it is expected to increase to more than double that amount, approximately ₹785 crore, this fiscal year. The company is making a significant investment of about ₹400 crore in a new plant in Vietnam.

👉 LIC: Life Insurance Corporation of India is planning to acquire one of India’s five private standalone health insurance companies. LIC, with assets worth over ₹51 trillion and a market share of over 61.5% in life insurance, is keen to secure a composite licence that will allow an insurer to sell both life and non-life policies.

👉 The Foreign institutional investors (FIIs) sold equities worth Rs 3,033 crore on June 13, while domestic institutional investors also sold equities worth Rs 553 crore on same day.

Domestic and International Events

  • India’s retail inflation, measured by the consumer price index (CPI), dropped to 4.75% in May from 4.83% in April, reaching its lowest level in a year, according to data from the statistics ministry. Inflation has remained below 5% since March. At the same time, factory output increased by 5% in April, up from 4.9% in March and 5.6% in February. For the fiscal year April-March (FY24), factory output grew by 5.9%, slightly higher than the previous year’s growth of 5.2%.
  • US treasuries rallied and yields dropped after a strong $22 billion sale of 30-year bonds and increased hopes of interest rate cuts by the US Federal Reserve amid cooling inflation and soft economic data. Bonds climbed across the US curve, with 10-year yields breaking below 4.3% and heading toward their lowest since March. The 10-year bond yields fell 9 basis points (bps) to 4.23%.
  • US producer prices unexpectedly fell in May amid lower energy costs. The producer price index for final demand dropped 0.2% last month after advancing by an unrevised 0.5% in April. Economists polled by Reuters had forecast the PPI nudging up 0.1%. In the 12 months through May, the PPI increased 2.2% after rising 2.3% in April.
  • Crude oil prices fell nearly a percent on Friday, with the global benchmark Brent oil trading around $82 level. Brent crude oil declined 0.88% to $82.02 a barrel, while the US West Texas Intermediate (WTI) crude futures dropped 1.03% to $77.81.
Hang Seng18,1131.0 %
Shanghai Composite3,029(0.3) %
Dow Jones38,647(0.2) %
DAX18,266(2.0) %
FTSE 1008,164(0.6) %
Nikkei38,720(0.4) %
Straits Times3,3250.5 %

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