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Market Movers: Thyrocare tanks on undercooked open offer; oil stocks rally

MUMBAI: While a newbie like PharmEasy’s acquisition of a veteran diagnostic firm like Thyrocare Technologies had got India Inc talking, the diagnostic firm’s investors were not pleased.

The merits of the deal are undeniable with brokerage firm Edelweiss Securities claiming that the acquisition could catapult Thyrocare to “a different league” altogether. Yet for investors, the deal appeared less sweet than it seems.

API Holdings, the owner of PharmEasy, will make an open offer to acquire 26 per cent additional stake in the company after buying out the promoter A Velumani’s 66.14 per cent stake. The open offer price has been set at Rs. 1,300 per share, a hefty 10 per cent discount to Friday’s closing price. The stock tanked at the open on Monday and ended a tad shy of 10 per cent lower for the day.

The discounted open offer price is likely to provide a disincentive to public shareholders of Thyrocare as API Holdings has sufficient stake in the company to run it. Any additional stake is not a pressing issue for the online pharmacy upstart.

passes cost pinch to consumers

The tractor maker’s shares ended nearly 2 per cent higher as it joined hordes of other companies on the land to raise the prices of its products. Squeezed by the surging input prices on one hand and the need to boost demand on the other, the company likely decided that it could not afford to absorb the higher input costs. The passing of the surging commodity costs to consumers will help protect the near-term margins of the company, and that’s all that investors care about in an inflationary environment.

Is oil the new metal?

The good days for oil producing companies continue as the stocks rose again on Monday on the back of rising global crude oil prices. Shares of Oil & Natural Gas Corporation rose over 1 per cent, while those of climbed over 3 per cent. Both the stocks have risen 9 per cent and 22 per cent, respectively, in June so far. With multiple global brokerages predicting the oil price to return to $80 per barrel as global demand booms, these scrips could be the new metal stocks of this bull market.

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