India Markets Tuesday Wrap-Up: Auto, Cement Stocks Cap Gains In Subdued Markets

by: Equitymaster

After some sporadic buying interest in index heavyweights, indices in Indian stock markets moved closer to the dotted line and ended near the day's lows today. As a consequence, while the BSE-Sensex closed higher by around 32 points (up 0.2%), NSE-Nifty gained a marginal 15 points. The BSE Mid cap and BSE Small cap indices too gained around 0.3% each. Auto, telecom, FMCG and cement stock bore the maximum brunt of selling pressure.

Most Asian indices closed higher today with Europe too opening on a positive note. The rupee was trading at Rs 55.68 to the dollar at the time of writing.

Future Group has announced the sale of its 53.67% stake in consumer finance company Future Capital Holdings Ltd (FCH) to private equity firm Warburg Pincus India Pvt. Ltd in an all-cash deal worth Rs 6.9 bn. FCH is a non-banking financial company (NBFC) that gives loans to medium and small enterprises, gold loans, two-wheeler loans and offers broking services. It is a wholly owned arm of Pantaloon Retail formed in 2007, and had a loan book of Rs 46 bn at the end of March 2012, with 197 branches in 41 cities.

The stake sale will give the Future Group's retail arm Pantaloon Retail the much-needed cash to help reduce its debt. The company had debt of around Rs 5.5 bn as of March 2012. Warburg Pincus will initially buy 40% of shares from Pantaloon, which will be followed by an open offer to buy another 26% in the company. The deal at Rs 162 per share is at a premium to FCH's stock price. This is the second such deal involving the Future Group in just over a month. On 30 April 2012, Aditya Birla Nuvo Ltd, announced acquisition of at least 50.01% stake in the Pantaloons Retail by issuing debentures worth Rs 8 bn at mutually agreed terms and taking on debt of Rs 8 bn.

Pharma major, Lupin's subsidiary, Lupin Pharmaceuticals Inc has received an approval for SUPRAX (Cefixime) Capsules 400 mg from the United States Food and Drugs Administration (USFDA). The company is also expecting to commence shipping of the product in the near future. The approval will expand Lupin's range of SUPRAX dosage forms available to treat the approved indications in appropriate patients. Lupin has a vibrant presence in the Indian pharmaceuticals market and has over the past several years made major strides in expanding its therapy portfolio. The company reported healthy 22% YoY growth in topline during FY12 led by growth across all business segments. The U.S. business grew by 22% YoY during the year. In the U.S. market, sales of the branded business were led by 'Suprax' with tablets and suspension growing by 30% YoY and 17% YoY respectively.