IPO season is back

Nifty50: 15,814 ▼ -45 (-0.2%)
Sensex: 52,735 ▼ -189 (-0.3%)

After a gap-up opening the markets witnessed profit booking. Of the Nifty50 stocks, 27 stocks closed in the red. 

Among the Nifty sectoral indices, PSU Bank (2.4%) and Metal (1.2%) were top gainers, whereas Media (-0.6%) and IT (-0.4%) declined the most. 

Here are the top stories of the day.

Dr Reddy’s launches Covid drug

• The pharma major today announced that it has launched 2-deoxy-D-glucose (2-DG), which is a drug it developed along with the Defence Research and Development Organisation for the treatment of Covid patients. 
• The company will supply 2-DG to government and private hospitals across India. Shares of Dr Reddy’s were up around 1.8% today.

Thyrocare slips on acquisition by PharmEasy 

• Shares of diagnostic chain Thyrocare Technologies fell by around 9% after online pharmacy PharmEasy’s parent said on Friday that it will acquire 66% stake in the diagnostics firm. The acquisition price is ₹1300 per share, about 10% lower than the previous closing price. 
• The online pharmacy platform is buying a majority stake in Thyrocare for ₹4,546 crore. The deal will trigger an open offer for the purchase of an additional 26% stake in the company.

Power Mech bags big project

• The infrastructure and construction company today announced that it has bagged a ₹9,294 crore project for mine development and operations from a subsidiary of state-owned Coal India. The contract is almost 4x the Power Mech's FY21 revenue.
• The project, which has been awarded to a consortium headed by Power Mech Projects, will be for 25 years. The shares of the company have risen by around 6% today.

IPOs make strong listing 

• Shares of Dodla Dairy today listed at a premium of 28.5% to their issue price of ₹428. Similarly, Krishna Institute of Medical Sciences (KIMS Hospital) also made a strong debut, listing on the exchanges at 22% higher than its issue price of ₹825.
• The IPO action is expected to continue in the coming week. India Pesticides, which was oversubscribed 29 times on Friday, is set to hit the exchanges on July 5. 

Closing bell

The markets struggled to hold fort at higher levels due to weakness in index heavyweights Reliance Industries and the HDFC twins. Today, the government announced further relief measures for pandemic-affected sectors, including healthcare, microfinance and tourism. Primarily, the government will provide guaranteed coverage to banks and NBFCs on the emergency credit extended to businesses in these sectors. Meanwhile, investors appear to be confident in sectors where demand is rather certain, such as the sugar sector where the underlying demand for ethanol remains strong. 

Good to know

What is an open offer?
When a company A acquires a majority stake in company B, it is required to provide an opportunity to the existing shareholders of company B to sell their shares. This is referred to as an open offer. In India, an open offer is triggered when a company buys a majority or more than 15% stake in a listed company. The acquirer has to make an open offer to buy at least an additional 26% stake in the company. It is seen as an exit route for the minority shareholders in the event of a new management taking over.  

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Investment in securities markets is subject to market risks; please read all the related documents carefully before investing. The securities quoted are exemplary and are not recommendatory. Past performance is not indicative of future results. Details provided in the above newsletter are for educational purposes and should not be construed as investment advice by RKSV group. Investors should consult their investment advisor before making any investment decision.