Financial markets did not wish investors green for Christmas this week. The Nifty 50 index of 50 benchmark stocks decreased 547 points or 2.50% over the week to close at 17,816 points. Similarly, the BSE Sensex 30 companies lost 2.60% or 1,596 value points over the previous 5 trading sessions to settle at 59,891 on Friday.
Markets were jittery over fears of Covid spreading again with Omicron's new BF.7 variant.
Market Drivers
Pharmaceutical stocks rallied this week posting the highest returns. Some of the top large-cap gainers this week included Divi's Laboratories (5.87%), Abbott India (6.58%) and Lupin (4.68%). Small-cap pharmaceutical companies rose much more in value up to 39% over the week.
At 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 summary
In this week's roundup, we'll take a look at Torrent Group acquiring troubled Reliance Capital, Reliance buying Metro AG's operations in India, the small-cap pharmaceutical brilliance, and more.
Torrent Group to acquire Reliance Capital
Energy to pharmaceuticals conglomerate Torrent Group won the bid to acquire Reliance Capital for Rs 8640 crore. The Ahmedabad-based business group defeated Hinduja Group's Rs 8,150 crore auction bid.
This marks Torrent's entry 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 he failed to pay his installments of Rs 24,000 crore.
Reliance buys Metro Cash and Carry India
On Thursday, Reliance Retail Ventures Ltd. (RRVL), a subsidiary of Reliance Industries, signed an agreement to buy a 100% stake in Metro Cash and Carry India, Metro AG's business in India.
Metro AG operates under the brand 'Metro India'. With this asset purchase, Reliance will now have control of Metro India's wholesale stores spread across the country. Additionally, a large network of registered kiranas and institutional clients will pass into the hands of RRVL.
Tata will buy UTI AMC
The Tata Group has entered the final stages of the purchase of UTI Asset Management Company (AMC), the eighth largest mutual fund in India. Currently, Life Insurance Corporation of India (LIC), Punjab National Bank (PNB), State Bank of India (SBI) and Bank of Baroda (BOB) together hold a 45.16% stake in AMC. In addition to this, Tatas has also received approval in principle from T Rowe Price Group, another lead investor who owns 23% of the property.
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 pharmaceutical stocks such as Morepen Labs, Shilpa Medicare, IOL Chemicals and Suven Pharmaceutical rallied later this week on renewed concerns about rising Covid-19 cases around the world. For example, 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 for pharmaceutical stocks is based on hopes of potentially higher revenues in the future for large pharmaceutical companies if cases continue to rise.
Written by Vikalp Mishra
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