• Indian stock market and companies daily report (September 14, 2015, Monday)

    Indian markets are expected to open on a Flat note with Positive bias tracking the SGX Nifty and most of global markets.

    The US markets remained in the same range as its previous session throughout Friday but managed to close in the green. The traders were on the side-line ahead of the two day Federal Reserve's monetary policy meeting starting September 16, 2015.

    For the second consecutive session, the European markets closed in the negative territory on Thursday. The pull back was attributed to investor uncertainty ahead of the release of China's Industrial Production data on September 13, 2015 and outcome of FOMC meeting next week.

    After registering early gains, Indian Markets ended flat on Friday as trader remained cautious ahead of economic data release from China on Sunday as well as much anticipated FOMC meet this week.

    Markets Today

    The trend deciding level for the day is 25,672 / 7,805 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 25,814 - 26,018 / 7,849 - 7,910 levels. However, if NIFTY trades below 25,672 / 7,805 levels for the first half-an-hour of trade then it may correct towards 25,468 - 25,327 / 7,745 - 7,700 levels.

    IIP posts growth of 4.2% in the month of July

    India's Industrial Production growth in July came in above analyst expectation as per the data released by Central Statistics Office on Friday. The industrial production rose by 4.2% in July, much higher than estimates of 3.5%. This was slightly below the revised June growth rate of 4.4%. The manufacturing posted 4.7% growth in July while mining and electricity generation grew by 1.3% and 3.5% respectively.

    JK Group (JK Tyres and group companies) to acquire Haridwar tyre unit of Kesoram industries

    JK Tyre & Industries (JKT) has signed a binding term sheet with Kesoram Industries to acquire its tyre manufacturing unit at Haridwar (Cavendish Industries Ltd). The Haridwar unit manufactures Truck and bus radial as well as two/three wheeler tyres. JK Tyre along with its associate/group companies would acquire 100% of Cavendish at an enterprise value not exceeding '2,200cr. JKT will hold the largest shareholding block and will have substantial management control of Cavendish with an option to place up to 55% with its associates /group companies. The acquisition would be funded by combination of debt and internal accruals raised by JKT and other JK Group entities. As per JKT, its financial exposure is expected to be to the order of '450cr. The transaction is expected to be completed over next few months. The deal appears to be expensive, as the tyre segment is currently loss making for Kesoram. As per 9MFY15 financials, the tyre business of Kesoram (which comprises of two plants one at Haridwar and other relatively smaller unit at Balasore) had revenues of '2,045 cr and an EBIT loss of '293.9cr. Further, since the acquisition is EPS dilutive and JKT would have to take debt to fund the acquisition, JKT debt/equity ratio which is already high (Current debt/equity is 1.9x) would worsen further. Given the expensive acquisition and deteriorating financials in the near term, we keep our rating on JK Tyre under review. We would update after getting more clarity from the management.

    Economic and Political News

    - Govt may extend interest subsidy scheme for exporters by 3 yrs

    - FIPB clears 14 FDI proposals

    Corporate News

    - Bharat Petroleum to invest '40,000cr to up capacity to 50 mtpa by 2021

    - Adani to expand capacity of Udupi power plant by 1600 MW

    - Elder Pharma in advanced talks with lenders for restructuring

    Contributed by Angel Broking
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