Midnight News – Jun 26th 2020

unnamed Midnight News  – Jun 26th 2020

 

Vedanta has secured the approval of 67% shareholders to delist the company from the bourses. Close to 93.3% of the votes were for the delisting, 6.7% voted against the delisting. The proposal required to be approved by nearly 67% of the votes. Currently, Vedanta Resources owns 50.1% of the capital of Vedanta Ltd and the balance 49.9% is held by institutional investors and retail investors. The bigger challenge for Vedanta will be securing the approval of minority shareholders where the domestic institutions are expected to play a more decisive role. The delisting has been planned at Rs.87.50.

In the aftermath of the trade restrictions imposed by India on China, many Indian exporters are facing retaliatory measures. Some Indian consignments have been held up in Hong Kong. There is no official word from China but there have been too many instances in the recent past of ports in China and Hong Kong holding up Indian goods. India only accounts for 2.6% of Chinese exports but China accounts for 5.5% of Indian exports. In the last few weeks, while there is no order from the government, customs officials have been holding up and also doing surprise examination of Chinese imports.

Sugar output is expected to rise by 12% to 30.5 million tonnes in the 2020-21 sugar cycle compare compared to 27.2 million tonnes produced in the current sugar cycle. The monsoon has been estimated to be bountiful this year and hence the ISMA has given strong projections next year. This would also mean that a larger share of the sugarcane produce will get diverted to molasses and to the production of ethanol which is blended with fuel. India has opened the current cycle with a stock of 14.5 MT and are expecting sales of 25MT and exports of 5.2MT leaving a closing stock of 11.5 MT in current cycle.

Apollo Hospitals reported 168% growth in net profits to Rs.206 crore for the Mar-20 quarter helped by growth in healthcare services and also in stand-alone pharmacies. The healthcare revenues grew by 19% to Rs.2572 crore while the pharmacy revenues grew by 33% to Rs.1359 crore during the quarter. SAP had a total store network of 3766 stores in all. The COVID-19 has led to a spike in the number of hospital admissions putting pressure on the system. However, medical tourism is likely to take a hit on account of the pandemic. Apollo was the first private Indian hospital and remains the largest.

The meeting of the SEBI board this week focused on ease of raising capital and insider trading norms. Preferential offers can now be priced at 12 weeks average price compared to the 26 weeks average price prevalent today. In the case of stressed companies like the NCLT cases, the acquirers have been exempted from open offer requirements. The Takeover Code has also been tweaked allowing open offers to be done through the stock exchange to speed up the process. In the case of indirect offers, SEBI has stipulated that 100% of the outlay for the open offer must be deposited in an escrow account 2 days before the actual announcement. Finally, SEBI also stipulated that companies will have to maintain a digital database of all unpublished price sensitive information and names of persons aware of it.

Ashok Leyland saw a sharp fall in overall sales revenues in the Mar-20 quarter by almost 60% to Rs.3838 crore. The company reported a net loss of Rs.57 crore in the quarter compared to a profit of Rs.653 crore in the corresponding quarter last year. The biggest challenge came from the sharp 42% fall in total volumes during the quarter on account of weak demand as well as the lockdown in the latter half of March. However, for the full financial year 2019-20, Ashok Leyland managed to report a net profit of Rs.240 crore albeit much lower than the Rs.1983 crore reported in the previous Mar-19 quarter.

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