Prabhat Dairy gains 20% on sale of dairy business to Lactalis

Share price of Prabhat Dairy surged 20 percent in the early trade on Tuesday after company board approved sale of its stake in step down subsidiary.

Company board approved the sale of the company's shareholding in its wholly owned step down subsidiary, Sunfresh Agro industries (SAIPL) to Tirumala Milk Products, a wholly owned subsidiary of French dairy multinational Groupe Lactalis, for total consideration of Rs 1227 crore.

Also the company board approved the sale and transfer of company's dairy products business, together with all specified tangible and intangible assets contracts, rights, personnel and employees, data and records, inventory and other assets and liabilities as agreed between the parties in relation to the said business by way of slump sale on a going concern basis, to SAIPL, post completion of transfer of SAlPL shares to the purchaser as contemplated above, for a total consideration of Rs 472.81 crore.

The above transactions are subject to customary conditions precedent including, shareholders’ approval, CCl approval, and is expected to close in Q1 of Financial Year 2019-20.

Vivek Nirmai, Joint Managing Director of Prabhat Dairy said, "The association with Lactalis-one of world‘s largest dairy players will offer this business a strong platform for accelerated growth momentum in becoming one of the largest private dairy businesses in India. I strongly believe that this partnership offers a promising future to our team members, partners and stakeholders.

The company intends to share a substantial portion of the proceeds from the sale with shareholders after meeting its tax and transaction cost obligations, company said in release.

After closing of the transaction Prabhat Dairy intends to further develop its cattle feed business in various parts of the country, as well as expand into allied businesses such as animal nutrition and animal genetics, it added.

At 09:20 hrs Prabhat Dairy was quoting at Rs 109.15, up Rs 16.10, or 17.30 percent on the BSE.

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Source: Moneycontrol

L&T falls 3% as SEBI rejects Rs 9,000-crore buyback issue

Shares of Larsen & Toubro declined by over 3 percent in morning trade as investors reacted to Sebi denying permission for its buyback issue.

The engineering major on January 19 said market regulator Sebi denied permission for its Rs 9,000 crore share buyback offer.

In a regulatory filing to stock exchanges, L&T said the Securities and Exchange Board of India (Sebi) has asked it not to proceed with the buyback.

"Since the ratio of the aggregate of secured and unsecured debts owed by the company after buy-back (assuming full acceptance) would be more than twice the paid-up capital and free reserves of the company based on consolidated financial statements", the buyback offer is not in compliance with the Companies Act and Sebi norms, the regulator said in a letter to the company.

L&T had proposed to buy back up to 6.1 crore shares from shareholders at a price of Rs 1,475 per equity share, aggregating to Rs 9,000 crore. The offer was open to those holding equity shares as on October 15.

A buyback reduces the number of shares available in the open market.

According to company sources, while turning down the proposal, Sebi has applied the financial ratio based on the consolidated financial statement of the company.

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Source: Moneycontrol

Sensex, Nifty jumps 1%; Heads up as 45 stocks hit 52-week low this week

The Indian market which started on a somber note managed to push the index back above crucial resistance levels in the week gone by, which was largely positive for the bulls. The Nifty50 reclaimed its crucial resistance level of 10,900 and closed the week with gains of 1.04 percent.

Similarly, the S&P BSE Sensex reclaimed 36,000 and closed 1.05 percent higher for the week ended January 18. The broader market underperformed with Smallcap index falling by 0.6 percent while the BSE Midcap index slipped a little over 1 percent in the same period.

Even though the benchmark indices managed to reclaim their crucial resistance levels, the number of stocks which hit 52-week low were more than the number of stocks which hit 52-week highs in the week gone by. This could be seen as a sign of caution ahead of the big event.

Stocks which hit fresh 52-week low include stocks like Force Motors, Dena Bank, KPR Mill, ABG Shipyard, Asian Granito, Lux Industries among others in the S&P BSE Smallcap index.

In the S&P BSE 500 index, as many as 15 stocks which include names like Tata Steel, Jindal Stainless, Sun Pharma Advanced Research Company, Jamna Auto among others.

However, experts feel that the trend is unlikely to continue as fresh signs of momentum are visible on the weekly charts. "The current trend of rising numbers of 52 weeks low candidates is likely to change as early sign of reversal is visible on the weekly charts of Small and Midcap indices. However, the transition is more likely to happen at a slow pace," Rupak De, Technical Analyst, Bonanza Portfolio told Moneycontrol.

"A bullish Butterfly Harmonic pattern is visible on the weekly chart of Nifty Midcap100. The Nifty SmallCap100 index is seen to be consolidating after a sharp rise, which may end in a breakout in the original direction (on the upside in this case). However, falling rupee may continue to do the spoil play going forward to some extent," he said.

Nifty Outlook:

The Nifty managed to hold on to its crucial resistance level of 10,900 levels in the week gone by which is a positive sign for the bulls. The index is currently forming a consolidation pattern and is likely to witness a range breakout soon.

"Formation like these usually witnessed before any key events. The current trading range has been 10,950-10,550 levels. It has formed a higher base which is structurally positive. The Nifty has formed multiple bullish reversal candlestick at the support zone which has kept the bulls interested," Manav Chopra, Head Research- Equity, Indiabulls Ventures told Moneycontrol.

"A decisive move above 10,950 would be a bullish sign and will take the index higher towards 11,350-11,600 zones. BankNifty witnessed some profit booking as it has declined from its recent highs and likely to see some consolidation in the near term. Price patterns indicate strong support clusters around the 27,200-27,000 levels on the downside which likely to provide a cushion in case of a decline," he said.

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Source: Moneycontrol

Rallis India rises 2% as board to consider merger of subsidiary

Share price of Rallis India rose 2.2 percent intraday Wednesday as company is going to consider the merger of its wholly owned subsidiary with itself.

The board of directors of the company at its meeting on January 17, 2019, will consider, amongst other matters, a proposal for the merger of its wholly owned subsidiary Metahelix Life Sciences with the company.

The share touched its 52-week high Rs 282.00 and 52-week low Rs 159.55 on 18 January, 2018 and 03 December, 2018, respectively.

Currently, it is trading 39.22 percent below its 52-week high and 7.43 percent above its 52-week low.

At 10:29 hrs Rallis India was quoting at Rs 171.40, up Rs 2.30, or 1.36 percent on the BSE.

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Source: Moneycontrol

Etihad offers to invest in Jet Airways at 50% discount; stock sinks 7% on news report

Jet Airways shares plunged more than 7 percent in the morning on January 16 after a media report said shareholder Etihad Airways offered to invest in the company at a price which is nearly half of January 15 closing price.

Sources told CNBC-TV18 that Etihad Group CEO Tony Douglas has written a letter to SBI Chairman on restructuring of the Indian airline.

As a part of restructuring, Etihad, which holds 24 percent stake in the Naresh Goyal-owned company, said it would invest in Jet only at a price of Rs 150 apiece, which is nearly half of Tuesday's closing price of Rs 294.40.

"Current situation of Jet Airways is precarious and needs emergency funding. Jet is unable to continue funding operations beyond this week," the report said, adding there is an imminent risk of lessors grounding aircraft.

In fact, the report further said Jet would require more equity funding than mentioned in the resolution plan. But Etihad would not pledge additional shares to raise debt, it added.

Jet Airways has now gone through three consecutive quarters, incurring over Rs 1,000 crore in losses in each. Earlier reports suggest the airline's lessors and MRO (maintenance, repair, overhaul) partners are losing patience over non-payment of dues. And its lenders are now wary of a Kingfisher-like situation after Jet Airways defaulted on loan repayments in December.

Jet Airways owes over Rs 8,000 crore to SBI-led consortium and its account is currently in SMA-0 category.

According to the report, Etihad Airways now wants operation control over its Indian partner, and that can only happen once Goyal lets go.

Hence, Etihad—a critical player in the whole deal—wants exemption from SEBI on preferential pricing and open offer guidelines. the report said the company is in touch with SEBI on exemption and wants written permission from the market regulator on the same.

Douglas also wants SBI to speak to aviation ministry on exemption, the report added.

Currently, as per rule, foreign airline company cannot have more than 49 percent stake in an Indian airline company.

Sources said in a letter to SEBI, Etihad CEO further said the debt to Naresh Goyal (who holds 51 percent stake in Jet) and related parties should not be converted to equity and bankers should insist on a moratorium on debt taken from Goyal

"Goyal's role should be well defined and no board seat for Goyal himself. Goyal and family should not be allowed to act on behalf of Jet Airways," the report said, adding Etihad wants 9-member board with only two representatives from Goyal & lenders.

According to the report, Goyal and related parties stake to be restricted to 22 percent. "Etihad will not control board or management, in-line with Indian rules"

Earlier this month, sources had also said that according to resolution plan, promoter Naresh Goyal is likely to step down from the board giving up majority control and his stake in the airline may be down to 20-25 percent with voting rights capped at 10 percent after the restructuring. "His son Nivaan Goyal may replace him on the board."

Etihad won't be able to persuade HSBC and Mashreq to lend more. Hence, Indian lenders have to bring in required funding, the report said.

Etihad had invested Rs 2,069 crore in Jet Airways in 2013 for a 24 percent stake. Jet's share price is trading 60 percent lower from the Rs 750-level last seen in 2013.

At 0950 hours IST, the stock was quoting at Rs 274.40, down Rs 20, or 6.79 percent on the BSE.

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Source: Moneycontrol