Recovery in banking majors to help Bank Nifty sustain above 42900 level; check list of bullish, bearish stocks By Ajit Mishra Markets have been maintaining the consolidation tone for over a month now and indications are still mixed over the next directional move. The benchmark indices attempted to regain some strength of late but the decline in the global markets again pushed the bulls on the back foot. Besides, restricted participation in index majors and underperformance of the broader indices is also weighing on the sentiment. Meanwhile, indications are mixed on the sectoral front wherein only the metal index is showing consistency in trend. Nifty (CMP:18118.55)- Nifty has been hovering within the 17750-18250 zone and currently trading closer to the upper band of the range. It crossed the hurdle of short-term moving averages viz. 20 and 50 EMA around the 18100 mark last week but couldn’t sustain. We need a decisive breakout on either side for the next directional move. Bank Nifty (CMP:42,821.25)- The performance of the banking index is largely aligned with the benchmark index. It is facing pressure on the rise around the 42700-42900 zone while the 41700-41800 zone is offering support on every decline. The recent recovery in select private banking majors is certainly encouraging but we need to see if they manage to build on the recent gains as that would play a key role in helping the index to sustain above 42900 levels. Bullish – Bharat Forge, Coforge, Gail, ITC, M&M, Manappuram, Petronet, Wipro Bearish – Ambuja Cement, Berger Paint, Naukri(Info Edge), Ramco Cement and Zee Ltd. (Ajit Mishra is VP- Technical Research at Religare Broking Ltd. The views expressed are author’s own.)
The Japanese pharma major is also filing a plea before the Delhi HC seeking appointment of forensic auditors to analyse transactions involving IHH, Fortis Healthcare and RHT, Singapore, as directed by the HC on October 18.
The development is likely to create legal hurdles and delay the proposed open offer as IHH had recently told FE that it could only go ahead if Sebi agreed with its legal interpretation that the SC’s September 22 order has lifted all such restraints.
IHH managing director and CEO Kelvin Loh told FE on November 9 that the company would like to go ahead with the open offer “as soon as possible” as there has already been a delay of four years. Ravi Rajagopal, chairman of Fortis Healthcare, had added that their legal counsel has advised that the company can go ahead with the open offer as the SC order has disposed of various appeals, including the suo motu contempt. “We have represented to the Sebi and the matter is with them,” Rajagopal had said.
However, legal observers told FE that the matter is not that straightforward and simple as the Delhi HC has to take the final call on the matter of open offer as well as whether a forensic audit has to be done in the share sale which was executed in 2018.
Also Read: IHH to float open offer for Fortis if Sebi concurs with our legal view: MD & CEO
Loh and Rajagopal had said the possibility that the matter may take a different turn when it comes up in Delhi HC cannot be ruled out.
IHH had in July 2018 acquired a 31% stake in Fortis Healthcare for Rs 4,000 crore through the bidding route. It had also earmarked Rs 3,000 crore to make an open offer for an additional 26% to the public shareholders as required under the law.
Daiichi has written to Sebi that the SC in its September 22 order had asked the HC to consider ordering a forensic audit into the dilution of FHL shareholding, repeated violation of undertakings and assurance by former FHL promoters — Malvinder and Shivinder Singh — and the transaction between FHL, IHH and the clandestine transfer of Rs 4,666 crore to RHT Singapore.
Daiichi is “severely prejudiced” with IHH’s clandestine attempt to subvert the status quo order directed by the SC on December 14, 2018, and September 22 with respect to the conduct of forensic audit and the pending proceedings before the HC by purportedly consulting regulatory authorities, including Sebi, on the proposed FHL-IHH transaction. It has reiterated that the FHL-IHH transaction was currently sub-judice before the HC where FHL is also a party, its solicitors, P&A Law Offices, have said in the letter.
“We further state that any such attempt by FHL and/or IHH to proceed with the FHH-IHH transaction would be in direct contravention of the HC and SC orders,” the letter sent by the law firm has stated. Daiichi Sankyo is pursuing the enforcement of Rs 3,500-crore arbitration award against the Singh brothers pronounced by a Singapore tribunal for concealing information when they sold Ranbaxy Laboratories to it for $4.6 billion in 2008. The apex court had in 2018 put on hold the sale of Fortis Healthcare to IHH on a contempt plea filed by the Japanese drugmaker against the Singh brothers.
The regulator had undertaken a series of surveillance actions to ensure that the volatility in the Adani group companies’ share prices was contained. This will be a part of the brief to the finance minister on Wednesday, the sources said.