Daily Market Update Dec 24

unnamed Daily Market Update Dec 24

The IPO of Antony Waste Handling was subscribed 15 times on the last day. Like Burger King and Bectors Foods, Antony also saw full subscription in a few hours of opening. However, the final subscription numbers were not as impressive as the QSR names. Antony received bids for 10.03 crore shares against the offer size of 66.66 lakh shares. QIB portion was subscribed 9.67 times, HNI portion 18.69 times and retail portion 16.55 times. The IPO had fixed a price band of Rs.313-315 but looking at the subscription one can expect pricing at the upper end of the band. Antony did an anchor placement of Rs.90 crore.

Anil Agarwal, promoter of Vedanta Group UK, will buy 4.9% stake in Vedanta Ltd on 24-Dec via block deals. The offer price has been fixed in the range of Rs.150 to Rs.160 per share. Post the transaction, the stake of the promoters in Vedanta Ltd will increase from 50.14% to 55.04%. This is in sync with the SEBI Takeover Cord which permits promoters holding between 25% and 75% to buy up to 5% via creeping acquisition method in one fiscal year. Any acquisition beyond 5% will impel the acquirer to make an open offer. Apparently, this stake increase will make it easier for the promoters to eventually delist the company. A couple of months back, Agarwal had shelved his plan to delist Vedanta Ltd after he could not muster the requisite 90% of shares of the company. LIC is the largest shareholder with 5.58%.

China’s aluminium imports have already touched a record annual high, even above the 2009 peak. This took the total aluminium imports for the Jan-No period to 2.44 MT, nearly 4 times the total imports in the same period last year. The last record was 2.32 MT of aluminium imports in 2009. China has limited need to import aluminium but the sharp spike in Shanghai aluminium pushed it above the London price. The situation is almost similar to 2009. Back then, a similar spread opened up as Chinese demand had recovered from the global financial crisis. China is the world’s largest producer and user of aluminium.

Delhi High Court ruled that Amazon’s attempt to control Future Retail would be violation of FEMA FDI rules. Amazon had called for a stay on the Reliance Retail / Future Group deal on the grounds that since Amazon had a stake in Future Coupons, they had the right of first refusal. The Future-RRVL merger deal is worth Rs.24,713 crore. Earlier, the High Court had upheld Amazon’s right to make a statutory appeal. However, it has added that any such agreement with any of the Future group companies would be violation of FEMA-FDI rules, if it entails a potential sale of stake in a domestic company to Amazon.

In a setback, India has been ordered to refund $1.2 billion to Cairn Energy PLC after it lost arbitration proceedings in a tax dispute. India had seized dividends and tax refund payable to Cairn and held the money in custody as a security against the tax dues. However, the arbitration tribunal ruled that the tax imposed was against the Indo-UK bilateral investment treaty. India has been asked to refund the monies held with interest to Cairn PLC. This is the second such adverse order as earlier India had also suffered a setback in the Vodafone case. In 2011, Cairn Energy sold its holdings in Cairn India to Vedanta Group

Even in a tough year, the Deal Street was robust and grew at 7% in 2020 at $80 billion. This was spread across 1268 transactions and 7% higher than last year. Interestingly, more than 35% of these deals were accounted for by global investments Reliance Jio and Reliance Retail. If you exclude the big-ticket deals in the telecom sector, the first half of 2020 actually saw investors putting plans on hold and focusing on cash conservation. Among the domestic deals; the biggest deal was RRVL buying the retail, wholesale, logistics and warehousing businesses of Future Group for $3.3 billion. Some of the biggest telecom deals included the investment by Facebook and Google into Jio Platforms. FDI worth $30 billion came in the first half. Telecom replaced technology as the leader, attracting investments worth $11.2 billion.

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