Tata Steel gains on merger plans, Infosys falls on contract termination & more

NIFTY50: 21,441 ▲ 91 (+0.4%)
SENSEX: 71,336 ▲ 229 (+0.3%)

• Benchmark indices ended higher for the third consecutive session
• In all, 41 of the NIFTY50 stocks closed in the green
• Brent crude futures traded near $79 per barrel on Tuesday after posting the largest weekly gain in over two months

Among the NIFTY sectoral indices, Oil & Gas (+1.5%) and Metal (+1.1%) were the top gainers, while Media (-0.5%) and IT (-0.4%) were the top losers.

What's Up

What's Down

Market Sentiment

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⭐ Tata Steel gains on merger plans

Shares of the steel major closed 1.3% higher today after the company announced on 23 December that it will hold a shareholder meeting on 25 January to review the scheme of amalgamation with Indian Steel & Wire Products. In 2022, it approved the merger of seven subsidiaries to increase synergies and reduce costs. The subsidiaries include Tata Steel Long Products (TSPL), The Tinplate Company of India, Tata Metaliks, TRF, Indian Steel & Wire Products, Angul Energy, and Tata Steel Mining and S&T Mining Company. Tata Steel shares have surged around 20% so far in 2023.

⭐ Infosys falls on AI contract terminationg

Shares of the IT major closed 1% lower today. This was after the company announced the termination of a contract with a global company worth $1.5 billion. Under this agreement, Infosys was supposed to leverage its AI solutions to enhance the global company’s business operation services. 

⭐ Aurobindo falls after 10 USFDA observations

Eugia US Manufacturing LLC, a subsidiary of Aurobindo Pharma, received 10 observations from the US Food and Drug Administration (USFDA) after a pre-approval inspection at its new injectable facility in the US. The inspection was held from 11 to 22 December. Aurobindo Pharma clarified that these are procedural observations and will be addressed within the specified time frame. Notably, the plant is yet to start commercial operations. The shares of the pharma company closed 0.3% lower today.

⭐ Jindal Steel gains on support extension to RINL

Shares of the steel manufacturer closed 0.2% higher today. This was after Jindal Steel & Power (JSP) signed an agreement with Rashtriya Ispat Nigam Limited (RINL) to operate RINL's Blast Furnace-3 from 30 December 2023. This collaboration will boost its monthly hot metal production by 2 lakh tonnes and enable JSP to access more liquid steel for slab casting and hot rolled coil production in their soon-to-be-commissioned hot strip mill at Angul.

⭐  Asian Granito gains on foray into sanitaryware

Shares of India’s leading tile maker closed 9% higher today. This came after the company announced that its wholly-owned subsidiary started commercial operations at its sanitaryware manufacturing plant in Gujarat. The management also informed that the company is planning to leverage its marketing network for a strong entry into sanitaryware, targeting a ₹400 crore turnover in the next five years.

IPO Corner

⭐ Shares of Motisons Jewellers made a stellar debut today, listing at a premium of 98% compared to the issue price of ₹55 per share. Shares of the company opened at ₹109 per share on NSE but witnessed a correction and closed 5% lower at ₹103.

⭐ Shares of the Suraj Estate Developers listed at a discount of 5% compared to the issue price of ₹360 per share. Shares of the real estate company opened at ₹340 per share on NSE and closed 1% lower at ₹334.

⭐ The IPO of Innova Captab was subscribed 55 times on the last day of bidding. The tentative listing date for the company’s shares is 29 December 2023.

Learn with Upstox

What is a merger?

A merger is the amalgamation of two companies into a single entity, usually aimed at fostering growth, entering new markets, or increasing market share to benefit shareholders. Unlike acquisitions, mergers involve both companies voluntarily combining on equal terms. The merger aims to expand market share, reduce operational costs, enter new markets, consolidate product lines, and enhance overall profitability. Following the merger, the new company distributes shares among the original companies' stakeholders.

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