Capitalstars Updates: Top Corporate News :- 22 Jan 2018

Top Headlines Of The Day:- 22 Jan 2018

Axis Bank Q3 beats estimates; profit jumps 25% to Rs 726 cr, asset quality improves

ONGC to acquire 51.11% government stake in HPCL, ONGC gains 5%

Dr. Reddy's fined $5mn by US court over drug packaging

Tata Motors hikes product prices by 1-3.7% in Mumbai

Tata Steel to raise Rs12,800cr through rights issue

Axis Bank Q3 beats estimates; profit jumps 25% to Rs 726 cr, asset quality improves
Country's third largest private sector lender Axis Bank's third-quarter earnings beat analyst expectations, with improvement in asset quality performance.
Profit during the quarter grew by 25.3 percent year-on-year to Rs 726.4 crore despite fall in other income & operating income, driven by lower provisions and higher net interest income.
Net interest income, the difference between interest earned and interest expended, grew by 9.2 percent to Rs 4,731.52 crore compared to Rs 4,333.73 crore in year-ago, with strong loan growth at 21 percent YoY.

ONGC to acquire 51.11% government stake in HPCL, ONGC gains 5%
Oil and Natural Gas Corporation (ONGC) signed a deal to acquire 51.11% stake in Hindustan Petroleum Corporation Limited (HPCL) for about Rs36,915cr in an all-cash deal, which would close by end of Jan 2018. The deal is proposed to buy 778845375 equity shares in HPCL at a cash purchase consideration of Rs473.97 per share which is ~13.8% premium to HPCL’s closing on Friday (BSE).
The goal of this deal was to create an integrated oil major to compete with global rivals and will help the government meet annual disinvestment target. The deal is exempt from a public offer as both the entities are related parties but the acquisition involving two listed entities have been carried out on an arm’s length basis.

Dr. Reddy's fined $5mn by US court over drug packaging
A federal court in the US has imposed a $5mn civil penalty on a subsidiary of Dr. Reddy’s Laboratories for distributing prescription drugs in blister packs that were not child resistant. Child-resistant packaging is a critical safety measure.
Dr. Reddy’s failed to ensure that children were protected from potentially harmful prescription drugs and that it failed to comply with Poison Prevention Packaging Act (PPPA) and the Consumer Product Safety Act (CPSA) according to the US Department of Justice. As per the complaint, Dr. Reddy’s distributed such prescription drugs until 2012 and also failed to notify the Consumer Product Safety Commission.

Tata Motors hikes product prices by 1-3.7% in Mumbai
Tata Motors Ltd (TML) has increased ex-showroom prices of all its cars by 1.0-3.7% in Mumbai. This comes after the company offered a limited-period insurance and exchange offer to its customers on five models. 
According to Cogencis, the company has raised prices of the Tiago hatchback by 1.3-2.4% for the petrol variant, and 1.7-2.6% for the diesel variant. Prices for Tiago's petrol variant now start at Rs3, 31,646 ex-showroom Mumbai, and Rs4, 11,181 for the diesel variant.
TML, on the consolidated level, derives ~80% of its revenue from a wholly owned subsidiary, JLR, which had witnessed EBITDA margin decline in FY16 and FY17 on account of weakness in volumes growth, model mix, and forex losses. Standalone business (~80% CV and PV) has experienced market share losses and is expected to turnaround the trend on account of better acceptance of SCR technology (CV) and series of new launches in PV segment (Tigor/Hexa/Tiago).

Tata Steel to raise Rs12,800cr through rights issue
Tata Steel announced that it would be raising Rs12, 800cr via a rights issue in mid-February 2018. The rights issue would consist of two simultaneous but unlinked offers of – (1) 15.54cr fully paid up shares at Rs510 per share, and (2) 7.77cr partially paid-up shares at Rs615 per share. The company would raise up to Rs8, 000cr from the first offer and Rs4, 800cr from the second offer. The rights entitlement ratio for the fully paid up shares is 4 fully paid up shares for 25 ordinary shares held on the record date. The rights entitlement ratio for the partially paid-up shares is 2 fully paid up shares for 25 ordinary shares held on the record date.

The record date for the issue is February 1, 2018. The issue would open on February 14, 2018, and close on February 28, 2018. On December 19, 2018, the Board of Directors of Tata Steel had approved the raising of capital via rights issue as well as a 5 mtpa expansion to the Kalinganagar steel plant. Currently, the Kalinganagar steel plant has a capacity of 3mtpa and had a utilization level of 100% for Q3FY18.

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