The financial markets didn’t wish the investors in green for Christmas this week. The benchmark 50 stock Nifty 50 index declined 547 points or 2.50% over the week to close at 17,816 points. Similarly, the 30 companies BSE Sensex lost 2.60% or 1,596 points in value over the previous 5 trading sessions to settle at 59,891 on Friday.
The markets got jittery on the fears of Covid spreading again with the new Omicron variant BF.7.
Market Movers
Pharma stocks rallied this week clocking the highest returns. Some of the large-cap top gainers this week were Divi’s Laboratories (5.87%), Abbott India (6.58%) and Lupin (4.68%). Small-cap pharmaceutical companies rose in value much more rising as much as 39% over the week.
On the other end of the spectrum, these companies lost the most market value: Rajesh Exports (20.61), Adani Wilmar (20.55), Central Bank of India (19.45%), Punjab and Sind Bank (18.31%), and UCO Bank (16.31).
The Recap
In this week’s recap, we shall take a look at Torrent Group acquiring the troubled Reliance Capital, Reliance buying Metro AG’s India operations, small-cap pharmaceuticals shining, and more.
Torrent Group to acquire Reliance Capital
The power-to-pharma conglomerate Torrent Group won the bid to acquire Reliance Capital for Rs 8,640 crore. The Ahmedabad-based business group defeated Rs 8,150 crore auction bid of the Hinduja Group.
This marks the entry of Torrent into the financial services industry by securing a 100% stake in Reliance General Insurance, a 51% stake in Reliance Nippon Life Insurance and other assets. Reliance Cap was set up for debt resolution the previous year when it failed to pay its dues of Rs 24,000 crore.
Reliance buys Metro Cash and Carry India
This Thursday Reliance Retail Ventures Ltd. (RRVL), a Reliance Industries subsidiary entered into an agreement to buy a 100% stake in Metro AG’s India business Metro Cash and Carry India.
Metro AG operates under the ‘Metro India’ brand. With this asset purchase, Reliance will now have control of Metro India’s wholesale stores spread across the nation. Additionally, a large network of registered kiranas and institutional customers will come into the hands of RRVL.
Tata to buy UTI AMC
The Tata Group has entered the final stages of purchasing UTI Asset Management Company (AMC), India’s eighth-largest mutual fund. Presently, the Life Insurance Corporation of India (LIC), Punjab National Bank (PNB), State Bank of India (SBI) and Bank of Baroda (BOB) combined own a 45.16% stake in the AMC. In addition to this, Tatas have also received in-principle approval from T Rowe Price Group, another marquee investor holding 23% ownership.
If the acquisition goes through, Tata AMC and UTI AMC together will become the fourth largest asset management company in India.
Small-cap pharma stocks shine
Shares of small-cap pharma stocks such as Morepen Labs, Shilpa Medicare, IOL Chemicals, and Suven Pharmaceutical rallied later this week on the refreshed concerns of surging Covid-19 cases around the globe. For instance, Morepen Labs and IOL Chemicals and Pharmaceuticals are up an impressive 39% and 25% respectively this week.
Market experts commented that the sharp rise in share prices of the pharma stocks is pinned on the hopes of potentially higher income in future from large pharma companies if cases continue to rise.
Written by Vikalp Mishra
