Shares of company have jumped 34% since its delisting offer commenced on 15th February
New Delhi: Shares of Alfa Laval India on Wednesday traded for the last time on the Indian bourses, as its Swedish parent joined a host of other multinational companies (MNCs) to delist their local units from the Indian stock market, reports PTI.
The trading in the shares of the company were discontinued after close of market hours today, pursuant to a delisting offer made by its promoter, Sweden-based Alfa Laval Corporate AB, for the public shareholders earlier this year.
In its last trading session, the stock on Wednesday closed 0.11% up at Rs3,946.50 on the Bombay Stoch Exchange (BSE). At the National Stock Exchange (NSE) also, the stock today closed 0.18% higher at Rs3,948.90.
However, the shares have jumped 34% since its delisting offer commenced on February 15.
The stock market has witnessed a slew of delisting offers in the recent months and the promoters have been MNCs for most of these entities. Some of the entities having announced or got delisted so far in 2012 include IT firm Patni Computer, media and entertainment firm UTV Software Communications, Carol Info Service and Exedy India.
Market experts attributed the trend to an opportunity for the promoters to buy out the minority public shareholders at low valuations prevailing currently.
Several other MNCs, whose overseas parents hold more than 75%, may also come out with delisting offers for their Indian units in the next few months.
According to brokerage firm ICICI Direct, Oracle Financial Services, Novartis, Honeywell Auto, Thomas Cook, Singer, Gillette, Astrazeneca Pharma, Blue Dart, 3M India among others, as probable candidates.
With SEBI mandating all listed companies to increase public shareholding to a minimum 25% by June 2013, these companies have to take a call sooner or later whether to reduce promoter holding or go for delisting mechanism.
The corporates, particularly fundamentally strong MNCs, may not have the inclination to increase their public holding and therefore could resort to delisting to have better flexibility in taking business decisions.
The delisting of Alfa Laval India, which offers heat transfer, separation and fluid handling technologies, involved its promoter offering to acquire up to 2,040,202 shares, accounting for a 11.23% stake in the domestic entity.
At that time, promoters held 88.77% stake in the company, which came down to 94.45% by March 31, 2012.
The remaining public shareholders can offer their shares to the promoter at Rs4,000 per share (exit price) for a period of one year starting from 19 April 2012.
After the delisting offer, Alfa Laval India had requested the BSE and NSE to delist its shares, pursuant to which the exchanges decided to discontinue the trading in its shares with effect from 12 April 2012. The stock would be delisted from the exchange records with effect from 19 April 2012.
Due to the dip in domestic demand and surplus production, cotton traders want the export ban lifted
The government, on Monday, announced that it won’t allow additional cotton exports during the current marketing year, after reviewing the current domestic consumption pattern. However, traders are disappointed with the announcement, saying that it will hurt the interest of the cotton growers as well as the ginners.
According to All Gujarat Cotton Ginners Association (AGCGA), the government estimate the production so far is 24 million bales (one bale is 170 kg). Considering the expected output, the total production will be somewhere around 34 million bales. The consumption is pegged at 26 million bales. However, there is very little demand from the spinning mills. Most of them have reduced their inventories and running with only 7-15 days of cotton reserves. Besides, most of the spinning mills are based in south India. Due to the issue of electricity cuts there, most of them operate at about 50% of the production capacity.
“So there will be dip in the domestic demand. We project the demand to be around 23 million bales. So we can easily export more cotton. Most of the mills will come under pressure, as with export ban there is no competition for them. So the ginners have to give whatever price the mills demand,” said an official at AGCGA.
On Tuesday, the Group of Ministers (GoM) headed by the finance minister Pranab Mukherjee, objected fresh cotton exports. “Until further order, there won’t be fresh registration,” said commerce, industry and textiles minister Anand Sharma after the meeting. It also decided that about 2-2.5 million bales would be allowed to be exported by already registered exporters only after revalidation and scrutiny.
On 5th March, the commerce ministry had announced a complete ban on cotton export after reviewing the shortfall in domestic supplies. However, the ban was partially lifted on 12th March after agriculture minister, Sharad Pawar, objected. Farmers from the cotton producing states of Maharashtra and Gujarat had also launched an agitation against the complete cotton export.
Meanwhile, the agriculture ministry projected domestic production at 34.08 million bales, 4% higher compared to last year. Hence more exports could be allowed.
In the current cotton year, India has exported 9.4 million bales. The cotton season runs from October-September.
Last week, the government directed Cotton Corporation of India (CCI) to purchase around 15,000 bales of cotton from Gujarat and maintain a reserve of one million bales per month. CCI has also been directed to buy cotton at Rs4,400 per quintal.
However, AGCGA feels that CCI doesn’t have the capacity to buy. This will force farmers to sell their produce to ginners at lower price.
Cotton traders are demanding exports to be allowed. Dhiren Sheth, president, Cotton Association of India, told Moneylife, “We are disappointed with the announcement. Exports should be allowed. If the domestic mills want they can buy and build their stock. Irrespective of the various estimations, cotton export will be in the interest of everybody including the growers. Prices will certainly see a downfall after the announcement.”
Traders also expect a fall in the cotton prices. “The price in the international market is Rs38,000 per candy. One candy is 356 kg of cotton. While in India the prices are Rs34,000 per candy after the export ban. When the exports were allowed, prices were in the range of Rs36,000 per candy. There was a clear loss for the traders as well the farmers. Considering the output, export should be allowed,” said Piyush Vasoya, Rajkot-based cotton exporter.
Meanwhile, the recently released report by the US Department of Agriculture (USDA), suggested that in India’s production is likely to fall by two million bales to 32.2 million in 2012-13. This is because the farmers are likely to switch over other crops, giving better remunerative on the back of an unclear cotton export policy.
Nifty has resisted a breakdown and may rally tomorrow
Nervousness ahead of the release of the key economic indicators and the RBI monetary policy kept the market subdued till noon. While gains in Europe perked up the indices in the second half, the news of a massive earthquake off the Indonesian coast resulted in a flat close.
The Nifty broke yesterday’s range to close in the negative. The index still carries a negative bias. If the index closes below 5,205, we may see it going down to the level of 5,165 and then further to 5,100. However, to see some gains the index must close above 5,295. The National Stock Exchange (NSE) saw a volume of 68.38 crore shares.
The market opened in the negative on global cues as Asian markets were trading lower on fresh European debt concerns. Nervousness ahead of the Reserve Bank of India’s (RBI) monetary policy, due next week, also weighed on the sentiments. The Nifty opened 35 points lower at 5,209 and the Sensex resumed trade at 17,126, down 118 points from its previous close.
The early slide saw all sectoral indices on the BSE trading lower. The market fell to its intraday low in the first half-hour itself with the Nifty touching 5,191 and the Sensex dropping to 17,076.
A gradual upmove was noticed as investors resorted to bargain hunting at lower levels. The market ventured into the green in noon trade on positive signals from the European markets. The benchmarks hit their day’s high around 2.00pm with the Nifty rising to 5,264 and the Sensex going up to 17,319.
However, as news of an 8.7 magnitude striking off the coast of Indonesia was known, the markets once again slipped into the red in the last hour. But a firm trend in the European indices ensured a flat ending. The Nifty closed 17 points down at 5,227 and the Sensex finished 44 points lower at 17,199.
The advance-decline ratio on the NSE was 659:977.
Among the broader indices, the BSE Mid-cap index declined 0.63% and the BSE Small-cap index fell by 0.27%.
BSE Healthcare (up 0.58%); BSE Bankex, BSE IT (up .019% each) and BSE Fast Moving Consumer Goods (up 0.10%) settled higher while BSE Metal (down 1.34%); BSE Capital Goods (down 1.05%); BSE Oil & Gas (down 0.86%); BSE Capital Goods (down 0.83%) and BSE Realty (down 0.77%) were the top sectoral losers.
The top Sensex gainers were Sun Pharma (up 2.08%); NTPC (up 1.79%); Infosys (up 0.92%); State Bank of India (up 0.43%) and HDFC Bank (up 0.33%). The losers were led by Jindal Steel (down 2.92%); Bharti Airtel (down 2.27%); Sterlite Industries (down 1.97%); BHEL (down 1.92%) and Tata Power (down 1.87%).
The key performers on the Nifty were Kotak Mahindra Bank (up 2.55%); Sun Pharma (up 2.01%); Infosys (up 1.86%); NTPC (up 1.85%) and Power Grid Corporation (up1.27%). The main losers on the index were ACC (down 4.31%); Ambuja Cement (down 4.05%); Reliance Infrastructure (down 3.71%); Jaiprakash Associates (down 3.30%) and Reliance Power (down 2.35%).
Markets in Asia settled lower as fresh debt concerns in Europe weighed on the sentiments. A spike in the yields of 10-year Spanish bonds, touching the highest level this year, had investors worried.
The Hang Seng declined 1.06% the Jakarta Composite lost 0.48%; the Nikkei 225 dropped 0.83%; and the Straits Times closed 1.21% lower. Bucking the trend, the Shanghai Composite rose 0.13% and the Taiwan Weighted advanced 0.21%. Markets in South Korea and Malaysia were closed for trade today. At the time of writing, the key indices in Europe were in the positive and US stock futures were in the green.
Back home, institutional investors—both foreign and domestic—were net sellers in the equities segment on Tuesday. While foreign institutional investors pulled out funds worth Rs328.67 crore, domestic institutional investors sold stocks amounting to Rs190.18 crore.
Piramal Healthcare today said it has received approval from European regulator to market its bio-orthopaedic product BST- CarGel used for cartilage repair in the European Union. The approval provides access to a $200 million-market in Europe with a potential for a larger market with greater penetration of treatment in Europe. The stock declined 1.24% to close at Rs450.30 on the NSE.
Unity Infraprojects is looking to generate up to 25% of its targeted Rs5,000-crore revenue by 2014-15 from overseas markets in a bid to ensure a better rate of return and higher margins. The stock settled 0.10% lower at Rs50.55 on the NSE.
Engineering, procurement and construction company, Tecpro Systems, has secured orders totalling Rs297 crore from Abhijeet Projects and NTPC. The APL order is worth Rs 155 crore while the NTPC order is valued at Rs 141.9 crore. The stock closed at Rs188.55 on the NSE, up 2.88% over its previous close.