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ICICIdirect Research Posted on 09:34am 25-Nov-2021

Reliance Industries will implement a scheme of arrangement to transfer gasification undertaking into a whollyowned...

* Market Outlook

Indian markets are likely to open on a muted note on the back of weak Asian cues as traders weighed Federal Reserve minutes that flagged the risk of a faster reduction in stimulus to fight elevated inflation.


*  Markets Yesterday

• Domestic markets ended lower tracking losses in IT, pharma and auto stocks, which were partially offset by gains in BFSI and oil & gas stocks amid news flow.

• US markets ended mixed amid increase in bond yields and flow of macroeconomic data.


* Key Developments

• Indian Overseas Bank (IOB) and Central Bank of India have informed the exchanges that there has been no information regarding the reported privatisation of the banks.

• Sun Pharma has been denied the plea to avoid a trial related to antitrust charges levied against Ranbaxy. Sun will have to defend against allegations that Ranbaxy conducted a scheme to delay the launches of three generic drugs by its rivals.

• According to Business Standard, six infrastructure firms, including Tata Projects and L&T, have submitted technical bids for the construction of an executive enclave that will house the Prime Minister's Office (PMO), Cabinet secretariat, India House and National Security Council Secretariat. The other four firms are Shapoorji Pallonji, NCC, PSP Projects and Ahluwalia Contracts. According to the CPWD's bid document, the project will be completed within 24 months at an estimated cost of | 1,171 crore.

• Reliance Industries will implement a scheme of arrangement to transfer gasification undertaking into a whollyowned subsidiary Reliance Syngas Ltd. Reliance Syngas was incorporated in November 2021 and is yet to commence its business operations.

• LTI informed the stock exchanges that it has partnered with Qatar based global conglomerate Power International Holdings (PHI) group to enable large scale digital transformation leveraging an extensive array of SAP solutions. As a part of deal, 63 companies of the group across four business domains will leverage SAP solution for transformation of more than 250 processes. It enables the company to have smooth data flow to enable more accurate and timely decision making across varied business landscape.

• The Ramco Cements has commissioned a waste heat recovery system at its Jayanthipuram Plant. This will help the company generate 5 MW of additional power from waste heat taking the company’s total power available from waste heat to 21 MW.

• The Reserve Bank of India (RBI) has imposed monetary penalty on Tata Communications Payment Solutions(TCPSL) (| 2 crore) for non-compliance with directions it issued under the Payment and Settlement Systems Act, 2007. It was observed that TCPSL was non-compliant with the directions issued by RBI on White Label ATM deployment targets and net-worth requirement.

• Nxtra by Airtel, the data centre subsidiary of Bharti Airtel has launched its new hyperscale data centre park in Chennai. This is Nxtra by Airtel’s third large data centre in Chennai. With the latest launch, Nxtra by Airtel has further consolidated its leadership in the Indian data centre industry. It now operates the largest network of data centres in India with 11 hyperscale and 120 edge data centres. We highlight that Nxtra by Airtel will invest | 5000 crore by 2025 to increase its capacity by 3x to over 400 MW. This will include setting up hyperscale data centre parks in key metro cities.

• Ipca has acquired 26.5% (for | 97.89 crore) of the share capital of Lyka Labs and entered into a joint management control agreement with the promoters. In addition, Ipca announced to acquire 26% additional equity shares from public shareholders. Lyka is engaged in the business of manufacturing and marketing of injectables, lyophilised injectables and topical formulations. Lyka’s financials for FY21: Revenue: | 64.47 crore, EBITDA: | 16.64 crore, PAT: loss of | 14.4 crore. The major business of the company is from India and from rest of the world (ROW) markets. This acquisition will enable the company to enter into lucrative lyophilised injectables business in India and ROW markets.

• Cadila has entered into a manufacturing license and technology transfer agreement for Covid-19 vaccine, ZyCoV-D with Enzychem Lifesciences, Republic of Korea. Cadila will provide manufacturing license and transfer the plasmid DNA vaccine technology to Enzychem. Enzychem will manufacture and commercialise the vaccine within its territory under a Zydus trademark. Cadila will receive the license fees and royalty payments. Partnership is estimated to yield ~ 80million or more doses of the plasmid DNA vaccine in 2022.

• According to Business Standard, three commercial banks, including State Bank of India (SBI), Canara Bank and Axis Bank, are likely to raise about | 7,500 crore in capital through additional tier I (AT I) bonds before the end of December 2021.

• In continuance with the concerns of Asian Paint’s related party transactions, proxy advisory firm InGovern has raised a concern on inclusion of promoter director in audit committee. According to advisory firm, the audit committee comprises only independent directors. Further, on the related party deals with Paladin (partially owned by one of the promoters), the company has clarified that “Out of | 553.88 crore of total purchases from related parties during FY20, total purchase from Paladin is | 1.3 crore (lower than 0.2%) of total purchase from related parties.

• Reliance Industries will, through its subsidiary Reliance Strategic Business Ventures, acquire the rights to own and operate a new franchise cricket team in the upcoming UAE T20 League.


*  Today's Highlight

Events: Japan Tokyo CPI.