Sensex Trades Lower; Gruh Finance Slips on Block Deal

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Stock markets in India are presently trading on a negative note. The BSE Sensex is trading down by 291 points and the NSE Nifty is trading down by 68 points. Meanwhile, the BSE Mid Cap index and the BSE Small Cap index are trading down by 0.5% and 0.3% respectively.

Among the sectoral indices, healthcare stocks, telecom and realty stocks are witnessing maximum selling pressure. Capital goods and power stocks are trading in green.

In the news from the NBFC sector. Gruh Finance share price slipped 8% on the BSE in early morning trade after the promoter Housing Development Finance Corporation (HDFC) sold more than 4% of the company’s paid-up capital in the open market.

Earlier, on May 25, the housing finance company had sold 32.6 million equity shares, representing 4.4% of the paid-up capital of Gruh Finance at price of Rs 310 per share.

While on March 28, HDFC had sold 12.2 million shares of Gruh Finance at a price of Rs 260 per share.

Reportedly, HDFC being a shareholder of Gruh Finance is entitled to 14.96% of post-amalgamation paid-up capital of Bandhan Bank, based on the share exchange ratio.

However, the Reserve Bank of India (RBI) has directed the Corporation to hold 9.9% or less of the paid-up capital of Bandhan, post the merger.

In view of this, HDFC is required to sell such number of shares in Gruh Finance so as to be entitled to 9.9% of the post amalgamation paid up capital of Bandhan.

Moving on to the news from the pharma sector. Dr. Reddy’s Laboratories has entered into a definitive asset purchase agreement with Upsher-Smith Laboratories, LLC (Upsher-Smith).

As per the scheme, the company would sell its US and select territory rights for Zembrace Symtouch (sumatriptan injection) 3 mg and Tosymra (sumatriptan nasal spray) 10 mg, (formerly referred to as ‘DFN-02’), which are commercialized through its wholly owned subsidiary, Promius Pharma, LLC.

Under the agreement, the company will receive US$70 million as upfront consideration, US$40.5 million in near term milestones and additional financial considerations including, existing contractual obligation and inventory.

Subsequently, the company will receive sales-based royalties on a quarterly basis, the reports noted.

To know more about the company, you can access to Dr. Reddy’s Q3FY19 result analysis and Dr. Reddy’s Stock Analysis on our website.

At the time of writing, Dr. Reddy’s Lab share price was trading down by 0.7%.

Here’s an interesting data on Dr. Reddy’s Lab, investing just Rs 100,000 in Dr. Reddy’s Labs in 1992, it would have given a whopping Rs 4.89 crores in 2014!

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This article (Sensex Trades Lower; Gruh Finance Slips on Block Deal) is authored by Equitymaster.

Equitymaster is a leading ‘independent’ equity research initiative focused on providing well-researched and unbiased opinions on stocks listed on the Bombay Stock Exchange.


Post Author: kwiknewz

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