The capital market and futures and options segments of MCX-SX were inaugurated by finance minister P Chidambaram in Mumbai on 9 February 2013
MCX Stock Exchange (MCX-SX) today said it has started its listing services as three companies including FMCG major Dabur India has listed its securities on the capital market segment of the exchange.
Dabur India was the first company to come on board, other two being Pennar Industries and DPSC.
Welcoming the three companies on board, MCX-SX MD and CEO Joseph Massey said, “We remain committed to offer issuers and ecosystem intermediaries best of service standards, which will be way above the current benchmark.”
Massey further added, “We would ensure continuous innovations for enhancing issuers’ experience.”
“With this, MCX-SX is now geared up to list shares of companies that are already listed on other exchanges and of those companies proposing to come out with initial public offerings,” MCX SX said in a statement.
The capital market and futures and options segments of MCX-SX were inaugurated by finance minister P Chidambaram in Mumbai on 9 February 2013.
Commenting on the development, Dabur India director Mohit Burman said: “We are sure that the new stock exchange, with its wide network, will reach out to every nook and corner of the country and help the company as well as country in broad basing the investor base.”
As per the listing fee structure, MCX-SX is not charging any processing fee or initial listing fee, while the initial listing fee of the National Stock Exchange is Rs50,000 and for BSE it is Rs20,000.
The exchange (MCX-SX) charges only annual listing fees which is significantly less than the existing industry average and is up to 50% less than NSE, BSE slabs.
For a company with a paid up capital of up to Rs5 crore MCX-SX would charge an annual listing fee of Rs7,500, while for those firms would paid up capital is more than Rs2,500 crore, the annual listing fee would be Rs12.50 lakh.
“MCX-SX has a simple listing fee structure, which is attractively priced in comparison with other exchanges,” the company statement said adding that “this will translate into reduced cost of issuance and continuous listing for the companies listing on MCX-SX.”
As on March 2013, NSE has 1,666 companies listed on it, while BSE has 5211 companies listed on it.
Shareholders holding on to the shares from now on will be living in hope that Unilever wants to delist HUL and will revise its buyback or open offer price from time to time
On 30 April 2013, Hindustan Unilever’s parent company, Unilever Plc, announced an open offer to buy roughly 487 million shares, or 22.52% of the share capital, of HUL, at 20% above the previous day’s closing market price (i.e. 29 April 2013). The open offer stipulates that Unilever Plc intends to buy back HUL shares, voluntarily, at a price of Rs600 per share. At the moment, Unilever Plc holds roughly 794 million shares in HUL, which forms 36.75% of the latter’s share capital. This means, if Unilever Plc intends acquire the 22.52% of the shares outstanding, it will take its total shareholding to 59.27%.
If you are a shareholder what should you do? Tender your shares? Or hold on for more gains?
Long-term shareholders will find it hard to make this decision. While HUL is a well-managed company with exceptional return on capital, Rs600 is way above the fair value currently. On the other hand, there is the possibility of Unilever Plc taking complete control (i.e. 100% ownership) in which case the price will head higher.
On the negative side, Unilever finds great value in HUL and mines it regularly. Recently, HUL and Unilever Plc signed a ‘New Agreement’ under which HUL will pay higher royalty costs at an increasing rate till 31 March 2018. It will be 0.5% of turnover till March 2014, and thereafter in a range of 0.3% to 0.7% of turnover in each financial year, leading up to a total estimated royalty cost increase of 1.75% of turnover compared to existing arrangement, till 31 March 2018. This means, HUL will have less to distribute to shareholders or reinvest from the pie.
Recently, Hindustan Unilever had announced good March quarter results. We had covered it over here (Hindustan Unilever reports robust results; net profit up 14.65%). Both its return on networth and return on capital employed are stupendous at 108% and 123% respectively. The valuations are at a premium though, with market capitalisation at 26.30 times operating profit.
In our view, investors are taking a gamble if they hold on to the shares. Three factors will decide the movement of shares: rising earnings, more and more extraction of value by Unilever and possibility of a higher buyback price. Of these three, a shareholder, as an outsider, has a sense of only the first factor. It is impossible to get a sense of the other two. And based on that first factor of earnings, HUL is currently overvalued. The price of Rs600 will act as a magnet and HUL shares will not fall but the upside looks limited. Shareholders holding on to the shares from now on will be living in hope that Unilever wants to delist HUL and will be interested in revising its buyback or open offer price from time to time. Meanwhile, if performance slows down even a little bit, the stock will stay flat or even fall.
Only a close below any previous day’s low on the Nifty would be the first sign of a reversal
Hopes of a rate cut by the RBI in its annual policy announcement tomorrow saw all-round buying, which resulted in the market closing near its three-month high. Only a close below any previous day’s low on the Nifty would be the first sign of a reversal. The National Stock Exchange (NSE) reported a volume of 61.89 crore shares and advance-decline ratio of 781:540.
The Indian market opened weak tracking its Asian peers which were trading lower in morning trade following reports that the HSBC Purchasing Managers’ Index (PMI) dropped to 50.4 in April from March’s 51.6 reading. The data follows Wednesday’s official Chinese manufacturing data, which painted a similar picture of a fragile economic recovery.
The Nifty opened 19 points lower at 5,911 and the Sensex resumed trade at 19,459, a cut of 45 points from its previous close. The market brushed aside the initial hiccups as resumption of buying activity in IT, oil & gas, banking, healthcare and metal sectors saw the indices start on a northward journey.
Across-the-board buying led the indices higher as trade progressed with IT and technology sectors leading the lot. The benchmarks hit their highs at around 1.30pm with the Nifty touching 6,019 and the Sensex climbing to 19,792. The Nifty crossed the 6,000 level mark for the first time since 4th February.
The market was seen moving sideways after hitting its high as cautiousness prevailed a day ahead of the announcement of the annual monetary policy by the Reserve Bank of India.
The market pared some of its gains but settled higher for the third day in a row. At the close the Nifty settled 69 points (1.17%) higher at 5,999 and the Sensex closed the day at 19,736, a jump of 232 points (1.19%) over its previous close.
Among the broader indices, the BSE Mid-cap index advanced 0.77% and the BSE Small-cap index gained 0.57%.
All sectoral indices settled in the green today. The top gainers were BSE IT (up 2.55%); BSE TECk (up 2.07%); BSE Capital Goods (up 1.59%); BSE Realty (up 1.48%) and BSE Bankex (up 1.17%).
Eighteen of the 30 stocks on the Sensex closed in the positive. The chief gainers were TCS (up 3.84%); Mahindra & Mahindra (up 3.48%); Larsen & Toubro (up 2.61%); Infosys (up 2.35%) and HDFC (up 1.99%). The main losers were Hero MotoCorp (down 1.96%); Hindustan Unilever (down 1.93%); Hindalco Industries (down 1.44%); GAIL India (down 1.38%) and Bajaj Auto (down 1.18%).
The top two A Group gainers on the BSE were—Reliance Communications (up 8.30%) and Syndicate Bank (up 8.01%).
The top two A Group losers on the BSE were—Essar Oil (down 3.14%) and Coromandel International (down 2.90%).
The top two B Group gainers on the BSE were—Noida Medicare Centre (up 20%) and Supertex Industries (up 20%).
The top two B Group losers on the BSE were— Zodiac JRD MKJ (down 19.92%) and SNL Bearings (down 19.64%).
Of the 50 stocks on the Nifty, 35 ended in the green. The key gainers were Reliance Infrastructure (up 3.43%); HCL Technologies (up 3.42%); TCS (up 3.38%); Jaiprakash Associates (up 06%) and M&M (up 2.98%). The major losers were Cairn India (down 1.94%); HUL (down 1.88%); Hero MotoCorp (down 1.62%); Hindalco Ind (down 1.39%) and Tata Motors (down 1.12%).
Markets in Asia settled mostly lower on factory outputs from the US and China coming in below expectations, showing signs of weak growth in the world’s two top economies. The Jakarta Composite, Indonesia’s benchmark index, fell the most in about six weeks after Standard & Poor’s cut its outlook on the rating for Southeast Asia’s biggest economy.
The Shanghai Composite fell 0.17%; the Hang Seng declined 0.30%; the Jakarta Composite dropped 1.32%; the KLSE Composite fell 0.24%; the Nikkei 225 contracted 0.76% and the Seoul Composite settled 0.34% higher. Bucking the trend, the Straits Times surged 1.02% and the Taiwan Weighted gained 0.43%.
At the time of writing, key markets in Europe were mixed with a negative bias and the US stock futures were in the positive, indicating a firm opening for US stocks later in the day.
Back home, foreign institutional investors were net buyers of shares totalling Rs876.93 crore on Tuesday. On the other hand, domestic institutional investors were net sellers of stocks amounting to Rs347.17 crore.
Pharma major Venus Remedies today said it has signed a deal with South Korean drug company Goodwills Co Ltd for exclusive marketing of its antibiotic drug ‘Elores’. The deal was signed after Companies and Intellectual Property Registration Office (CIPRO) of Republic of South Korea granted the patent to the product, Panchkula (Haryana) based Venus Remedies said in a statement. Venus Remedies advanced 1.94% to close at Rs250 on the NSE.
Apollo Tyres today said it has set up its second exports hub in Thailand to cater to the ASEAN region, which contributes 40 per cent to the company's overseas income. After Dubai for West Asian region, this is the second hub outside the company's operations in India, The Netherlands and South Africa, it added. The stock fell 0.31% to close at Rs96.30 on the NSE.
Private carrier Jet Airways has sought approval of the Foreign Investment Promotion Board (FIPB) to sell 24% stake in the company to Gulf carrier Etihad Airways, sources said today. After months of deliberations, Jet Airways and Etihad last month signed a deal under which the premier Indian carrier agreed to sell 27.26 million shares in a preferential offer to the latter at Rs754.74 a piece. Jet Airways declined 1.77% to close at Rs610.15 on the NSE.