Sunday, November 23, 2014

Kotak-ING Vysya deal: CCI will look at combined market share

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NEW DELHI: The Competition Commission will look at the overall market share and size of the combined entity in the case of ING Vysya Bank's merger with Kotak Mahindra Bank when the proposal comes before the regulator for its approval.

In the biggest merger in India's banking sector, Kotak Mahindra Bank yesterday announced the buyout of ING Vysya Bank in an all-stock deal valued at Rs 15,000 crore.

"I suppose in due course they (the two banks) will make a filing to the Competition Commission. We will look at it as we look at any other merger proposal," the Competition Commission of India (CCI) Chairman Ashok Chawla told reporters here.

"The matter that will engage our attention is that the combined entity, what will be its market share and how big that will be. Based on that a decision will be taken within parameters of competition law," he said.

Chawla was responding to a query on what aspects of the deal the Commission would be looking into. He was speaking on the sidelines of Skoch Summit here.

CCI keeps a tab on anti-competitive practices at the market place across sectors and works to prevent as well as curb such activities.

Under the all-stock deal, ING Vysysa stock has been valued at Rs 790 a share, which is a 16 per cent premium to the 30-day stock price as of November 19, while pegging Kotak Bank at Rs 1,119 a share in similar manner.

Accordingly, ING shareholders would get 725 Kotak Mahindra Bank shares for 1000 shares of the Bangalore based lender. This values ING Vysya Bank at Rs 15,033 crore.

Post-deal, ING Group NV would have 6.5 per cent in the combined entity, while Kotak promoters' stake would be diluted to 34 per cent from 40.12 per cent.

After the transaction, ING would be the second largest stakeholder in the combined entity.
Source : economictimes

Saturday, November 8, 2014

7 midcap stocks to bet post Sept quarter results

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Midcap stocks are flavour of the season. The index is up 49% year-to-date and in 6 months it has jumped 35.90%. The BSE Midcap index touched its all-time highs of above 10,000 that it scaled in early 2008. ICICI Direct recommends 7 midcaps stocks to buy post September quarter results.

So, if you have been fence sitting and want to buy some midcaps, here are some stocks to buy.

Pidilite Industries

Rating: BUY

Potential upside: 16%

Target: Rs 462

Rationale: Estimate revenues, earnings CAGR of 19% in FY14-17E on the back of intact demand from tier II, tier III cities. A recovery in margin coupled with strong return ratios would justify the company’s re-rating possibilities.

IRB Infrastructure

Rating: HOLD

Target: Rs 269

Potential upside: Given the strong order of Rs 11,587 crore providing strong revenue visibility, see its earning to grow at 22.6 percent CAGR during FY14-16E. However, most of the positives have already been priced in the CMP. Hence, maintain HOLD.

Gujarat Pipavav Port

Rating: HOLD

Target: Rs 175

Potential upside: 3%

Rationale: With debt-free structure and ECB for funding further capex, interest cost is expected to decline substantially. Further, its higher revenue visibility and better margin on account of fixed cost model together with revenue from tank farms will provide further upside.

Gateway Distriparks

Rating: BUY

Target: Rs 330

Potential upside: 14%

Rationale: As container volumes at major ports like JNPT andChennai post growth of 9% and 5% YoY, respectively, in YTD, we expect the CFS segment to post confident growth.

East India Hotels

Rating: BUY

Target: Rs 124

Potential upside: 19%

Rationale: In terms of earnings, expect sales CAGR of 6.8% during FY14-16E coupled with expansion in margins.

Taj GVK Hotels

Rating: BUY

Target: Rs 116

Potential upside: 13%

Rationale: Expect the hotel business in Hyderabad to improve post resolution of the Telangana issue over next two years. Further, expansion into newer geographies of Bangalore and Mumbai would provide the company with better scale and geographic diversity over the longer-term.

Greaves Cotton

Rating: BUY

Target: Rs 175

Potential upside: 25%

Rationale: A recovery in the engines business and complete exit from the infrastructure business may drive PAT CAGR at 18% over FY14-17E. Even with the improvement in GDP, we expect sales to witness 14% CAGR over the same period.
Source : Moneycontrol

Both the indices end marginally higher after touching new peak

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MUMBAI: Both the indices, sensex and nifty, ended marginally higher after touching life-time high in a truncated trading week.

This was on strong buying mainly in Realty, Healthcare, Banking and IT sectors despite mild profit-booking from operators in Metal, Power, Auto and Consumer Durable.

The Sensex conquered the 28,000 mark for the first time on expectations of more reforms by the Modi government and a rate cut by the RBI.

Markets were enthused after Finance Minister Arun Jaitley promised reforms in labour, land acquisition and insurance laws and expressed readiness to look at privatisation of some loss-making public sector companies.

Strong foreign capital inflows coupled with higher European cues mainly boosted the domestic market sentiment, even as services sector activity in India stagnated during October amid weaker growth of new orders as per an HSBC survey.

"The fall in crude oil prices will have a positive impact on, among other things, inflation....it will embolden the RBI to cut rates," said HDFC Securities in a note.

The sensex resumed higher at 27,943.04 and shot up further to an all-time high of 28,010.39 on initial strong buying. However, it declined afterwards to 27,739.56 before concluding the week at 27,868.33, showing a marginal gain of 2.70 points or 0.01 pct.

The CNX 50-share Nifty also moved by 14.80 points or 0.18 per cent to finish at 8,337.00 after touching an all-time high level of 8,365.55 during the week.

Ssentiments were on the negative side at the fag-end of the week in reaction to the OECD report, which lowered India's GDP growth forecast to 5.4 per cent for this year from 5.7 per cent earlier.

But, the downside also remained limited, tracking continuous FIIs inflow," said Jayant Manglik, President-retail distribution, Religare Securities.

BSE remained closed on November 4 for "Muharram" and November 6 on account of "Gurunanak Jayanti".

21 scrips out of the 30 Sensex companies ended lower while only nine finished higher.

Major losers from the Sensex pack were Gail India (8.34 per cent), Coal India (6.67 per cent), Hero Motocorp (5.33 per cent), M&M (4.81 per cent), Hindalco (4.38 per cent), SSLT (3.75 per cent), NTPC (3.63 per cent), Tata Steel (3.51 per cent), Tata Power (2.61 per cent), BHEL (2.60 per cent) and Reliance Ind (1.83 per cent).

However, Axis Bank rose by 6.86 per cent, followed by Dr Reddy (6.82 per cent), Sun Pharma (5.45 per cent), ICICI Bank (3.70 per cent), Infosys (2.89 per cent) and ONGC (1.04 per cent).

Among the S&P BSE sectoral indices, Realty rose by 5.73 per cent, followed by HC (3.70 per cent), Bankex (1.79 per cent), IT (1.11 per cent) and Teck by 1.06 per cent while Metal fell by 4.35 per cent, Power (1.49 per cent), CD (1.30 per cent) and Auto (1.29 per cent).

Small-cap and Mid-cap indices rose by 1.70 per cent and 1.68 per cent, respectively on persistent buying from retail investors.

Meanwhile, Foreign Portfolio Investors (FPIs) bought shares worth a net Rs 5,042.33 crore during the week, including the provisional figure of November 7.

The total turnover at BSE and NSE fell to Rs 11,865.96 crore and Rs 59,859.41 crore, respectively from Rs 15,192.70 crore and Rs 85,382.17 crore last week.
Source : economictimes