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Markets Open on a Flat Note
Tue, 16 Aug 09:30 am

Majority of the Asian markets opened lower, despite record closing highs in US equities. The Nikkei 225 is off 1.06% while the Hang Seng is down 0.21%. The Shanghai Composite is down by 0.52%.

Meanwhile, Indian stock markets have opened the day on a flat note. BSE-Sensex is trading higher by 26 points and NSE-Nifty is trading lower by 2 points. Meanwhile, both S&P BSE Mid Cap and S&P BSE Small Cap are trading higher by 0.3% and 0.1% respectively. Sectoral indices opened on a mixed note with FMCG and power stocks leading the gains. While, realty and IT stocks are leading the losses. The rupee is trading at 66.88 against the US$.

FMCG stocks have opened on a firm note with ITC and Emami leading the gains. According to an article in The Economic Times, Dabur will double its herb cultivation as the company plans to launch newer ayurvedic products amid growing demand and increasing competition from Patanjali Ayurved. The company plans to acquire 3,800 acres of medicinal herb farms by March next year, its fastest expansion so far. At present, it has nearly 2,000 acres under cultivation.

Dabur's latest initiative will involve 2,500 farmers, up from 1,200 now. The company will also reportedly enter allied categories within the food and oral care segments without straying away from the core ayurvedic products business.

Dabur is also moving fast to open an online platform where it might sell products of other companies, along with its own. The platform might go live next year. It would sell ayuveda-based health care products, along with providing information on ailments and therapy. It might also offer products from other key brands.

The company's consolidated net profit rose 11.82% YoY to Rs 2.92 billion in Q1 June 2016. Dabur is also focusing on aggressive expansion of its manufacturing capability and will be investing Rs 5 billion in FY 2017 to establish new production units as also to expand its existing plants in India and abroad.

Moving on to news from aluminum sector. Shares of Hindalco have opened the trading day in green after it was reported that the company has divested its stake in Australian subsidiary Aditya Birla Minerals for 73 million Australian dollars to Metals X. This comes at a time when Grasim & Aditya Birla Nuvo recently announced a US$9-billion merger plan.

Aditya Birla Minerals is a listed company in Australia, a subsidiary of Hindalco, where the company held 51% stake. Aditya Birla Minerals supplied less than 10% of copper concentrates to Hindalco while rest was mainly sourced from South America.

In another development, Hindalco's Novelis unit will launch a bond sale in the US to raise as much as US$1.1 billion to refinance debt. The money will go toward refinancing bonds that mature in December 2017. The base size of the issue is $550 million with an option to retain oversubscriptions.

The company plans to take advantage of demand for Indian bond in global market. Demand for debt instruments of Indian companies has gone up after the global bond market was roiled by Brexit and amid a climate of zero interest rates as central banks looks to bolster faltering economies.

It is to be noted that Novelis contributes close to half of the Hindalco's consolidated revenue.

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Apr 21, 2017 (Close)

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