The Competition Commission of India or CCI has given its go-ahead to the acquisition of Air India by the Tatas. The acquisition will be done by Talace, an affiliate of Tata Sons. Talace will acquire shares in
Air India Express and Air India SATS Airport Services; apart from the core aviation operations of Air India. It may be recollected that the Tatas had placed the winning bid of Rs.18,000 crore for Air India. Air India has total debt of Rs.61,560 crore of which the Tatas will assume Rs.15,300 crore. Air India is deep in losses.
Wipro will acquire Edgile, a cybersecurity service company based out of Texas, for $230 million. This will enhance and enrich the risk consulting practice of Wipro. The two companies will also pool their strength in strategic cybersecurity services. The deal is expected to be completed by March 2022. Edgile is a 20 year old company with 182 employees onsite and CY20 revenues at $44.1 million. Wipro and Edgile will develop Wipro CyberTransform, a suite to help enhance boardroom governance of the cybersecurity risk.
Three companies that had filed their DRHPs in August and September have got the go-ahead from SEBI for their public issues. Ixigo got approval to raise Rs 1,600 crore via IPO comprising Rs.750 crore of fresh issue and Rs.850 crore OFS. Fresh issue proceeds will be used to fund organic and inorganic growth plans. Sahajanand Medical Technologies IPO will be worth Rs.1,500 crore IPO will be used to retire and prepay debt. Keventer Agro IPO will raise Rs 350 crore via fresh issue and sell 107.68 lakh shares via offer for sale.
Hindustan Unilever looks to have the ability to pass on cost hikes. It will raise the prices of a slew of its products by 7% to 10%. These include soaps, detergent powder and detergent bars. For example, the Lifebuoy multipack will cost Rs.9 more while the Lux multipack will cost Rs.10 more. HUL has witnessed a sharp spike in input costs for toilet soaps and detergents, which it had committed to pass on to the end customer while announcing its last quarterly results. Even the price of Rin and Wheel has been hiked.
In a sudden move, SEBI barred exchanges from launching new futures contracts in paddy, wheat, chana, mustard seeds, soybean, crude palm oil and moong for next 1 year. The order comes into immediate effect and the purpose is to check rising prices by curbing speculation. For the next one year, no new contracts will be introduced on these commodities. Also, fresh positions will not be allowed, although squaring off will be permitted for existing open positions. Soybean is likely to be impacted by this move.
Most stocks in the Future Group rallied up to 20% after the CCI had suspended Amazon’s 2019 deal with Future Coupons. In addition, the CCI had also imposed Rs.200 crore penalty on Amazon for non-disclosure of material information on the deal intent. Future Retail, Future Supply Chain Solutions, Future Lifestyle Fashions, Future Enterprises and Future Consumer were all locked in 20% upper circuit. Back in Aug-19, Amazon had acquired 49% stake in Future Coupons, which indirectly gave them 4.81% in Future Retail.
In an otherwise weak market, Cipla gained 3% to on 20th December after the company reported that it had received USFDA approval for its Lanreotide injection. Incidentally, Lanreotide Injection is prescribed for treatment of patients with Acromegaly and Gastroenteropancreatic Neuroendocrine Tumours. In the US markets, the reference drug has a potential market size of $867 million. For Cipla, the US business has grown at 15% CAGR between FY16 and FY21 and has contributed 20% to total revenues of Cipla in FY21.
Vedanta has acquired Nicomet, the leading producer of nickel and cobalt in India. Nicomet is based out of Goa. With this buyout, Vedanta becomes India’s sole producer of nickel. This also helps Vedanta get to its carbon neutrality goals. Nickel is a vital input in the manufacturing of stainless steel and batteries for electric vehicles (EVs). On the other hand, cobalt is a key element for lithium-ion battery for EVs, energy storage systems etc. Nickel and cobalt are regarded the minerals of the future for their renewable thrust.