Kotak Bank's Big Acquisition, Biocon-Serum Strategic Alliance, and Buzzing Stocks Today

Mon, 20 Sep Pre-Open

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Indian share markets ended on a negative note on Friday.

Benchmark indices tumbled from record high levels to snap their three-day winning run amid losses in energy, auto, and pharma stocks, despite firm global cues.

At the closing bell on Friday, the BSE Sensex stood lower by 125 points (down 0.2%).

Meanwhile, the NSE Nifty closed lower by 44 points (down 0.3%).

Kotak Mahindra Bank and HDFC Bank were among the top gainers.

Tata Steel and Coal India, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended down by 1.1% and 1%, respectively.

Sectoral indices ended on a negative note with stocks in the metal sector, realty sector and energy sector witnessing most of the selling pressure.

Banking and telecom stocks, on the other hand, witnessed buying interest.

Shares of Tata Elxsi and Polycab India hit their respective 52-week highs.

Gold prices for the latest contract on MCX were trading up by 0.3% at Rs 46,208 per 10 grams at the time of closing stock market hours on Friday.

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Top Stocks in Focus Today

Among the buzzing stocks today will be Kotak Mahindra Bank.

Kotak Mahindra Bank announced that it has acquired the vehicle financing loan portfolio of Volkswagen Finance (VWFPL), Volkswagen Group's Indian captive financing arm.

Kotak Mahindra Prime (Kotak Prime) will acquire the passenger cars and two-wheelers portfolio, while Kotak Mahindra Bank (KMBL) will acquire the commercial vehicles portfolio of VWFPL.

With this, the company will gain access to over 30,000 high-quality customers with a total loan outstanding with VWFPL of around Rs 13.4 bn.

The acquired loans are classified as 'Standard Loans' as per the current Reserve Bank of India (RBI) guidelines. In addition to the standard loans, Kotak has also acquired the non-performing assets portfolio of VWFPL.

D Kannan, Director of Kotak Mahindra Prime said,

• The strategic intent behind this acquisition is to further strengthen Kotak's vehicle financing loan portfolio and expand our market share. VWFPL has been operating in the country since 2009 and during this time has built a strong customer portfolio.
  
  The long-term growth prospects of the Indian vehicle market are very attractive and this acquisition reinforces Kotak's standing as one of the leading vehicle financing players.

IDFC share price will also be in focus today.

IDFC said that its board and the board of IDFC Financial Holding Company (IDFC FHCL) have approved to initiate steps to divest its mutual fund business.

IDFC AMC's average assets under management (AAUM) for the June quarter was at Rs 1.3 tn, as per AMFI data.

In a statement, the company said,

• The boards have authorized respective strategy and investment committees to take necessary steps, including appointment of investment banker, for the same.

The company is losing investor confidence over delay in value unlocking

At a pre-annual general meeting conference call held on 14 September 2021, investors expressed disappointment with the slow pace of progress of the disinvestment.

Bharti Airtel Chairman Sunil Bharti Mittal to Vodafone's CEO Nick Read

Bharti Airtel Chairman Sunil Bharti Mittal has reportedly spoken to Vodafone Group CEO Nick Read about the need to invest more.

Advising Vodafone Idea to pump in funds to stay in the game, Mittal said at a virtual press meet on Thursday that they need to contribute their own money in the company.

UK-based Vodafone and its joint venture partner in India, Aditya Birla Group, have maintained till recently that they would not throw good money after bad.

Mittal also had a conversation with Reliance Industries Chairman and MD Mukesh Ambani on all telcos working together.

He said they spoke about the need for synergy between the telecom players.

• Time has come for three plus one operators to close ranks and work as a team for building telecommunications rather than being fierce competitors. We will compete, but just like in other industries like steel, build the eco system together.

This comes just a day after the centre announced a relief package for the telecom sector.

The government has offered a moratorium, which will be applicable from 1 October. Any company that decides to avail of it would pay interest at the rate of the marginal cost of funds-based lending rate (MCLR) plus 2%.

Acknowledging that Bharti Airtel would avail the moratorium of dues offered by the government, Mittal said the company would redirect the cash flow to aggressively build networks.

Biocon Biologics, Serum Institute Life Sciences Announce Strategic Alliance

Biocon Biologics (BBL), a subsidiary of Biocon, and Serum Institute Life Sciences (SILS), a subsidiary of Serum Institute of India, have announced a strategic alliance under which BBL will receive access to 100 m doses of vaccines per annum for 15 years in return for an equity stake to SILS.

Under the terms of the agreement, BBL will offer a 15% stake to SILS, at a post-money valuation of US$ 4.9 bn.

BBL will also generate a committed revenue stream and related margins from the second half of the financial year 2023. Adar Poonawalla will have a seat on the board of Biocon Biologics.

In addition to vaccines, the strategic alliance will develop antibodies targeting several infectious diseases like Dengue, HIV, etc.

The two companies will enter Service Level Agreements (SLAs) to manufacture and distribute the vaccines and antibodies. Vaccines are a complementary business fit to BBL and provide a new dimension to improving global healthcare.

Kiran Mazumdar-Shaw, Executive Chairperson, Biocon & Biocon Biologics, said,

• This alliance will complement the strengths and resources of the two leading players in vaccines and biologics. Our shared vision of building large scale businesses having global impact makes it a unique and synergistic value creation opportunity.

Biocon Biologics will also establish, at its cost, a vaccine research and development (R&D) division to support the strategic alliance in developing both vaccines and biologics for communicable diseases.

How this collaboration pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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