Summary of "STOCK CRASH होगया, अचानक आई खबर😱😱🔴Latest Stock Market News🔴Stock Market For Beginners Stocknews SMKC"
Summary of Video: STOCK CRASH होगया, अचानक आई खबर😱😱🔴Latest Stock Market News🔴Stock Market For Beginners Stocknews SMKC
The video discusses a sudden acquisition news in the Indian stock market involving two pharmaceutical companies: Torrent Pharma and JB Chemicals and Pharmaceuticals. The acquisition has caused a significant market reaction, with Torrent Pharma’s shares rising by 4% and JB Chemicals’ shares dropping by 7%.
Main Financial Strategies, Market Analyses, and Business Trends Presented:
- Acquisition Announcement and Market Reaction:
- Torrent Pharma acquired a controlling stake (more than 50%) in JB Chemicals, making JB a subsidiary.
- Torrent Pharma’s stock rose due to the acquisition, while JB Chemicals’ stock fell sharply.
- Understanding Open Offer in Acquisitions:
- When a company buys more than 25% stake in another company, it must make an open offer to the remaining shareholders.
- The open offer allows existing shareholders to sell their shares at a specified price.
- The price of the open offer is regulated by a formula based on the average stock price over the past 26 weeks before the announcement.
- This price can be at a premium or a discount compared to the current market price.
- Reason for JB Chemicals’ Stock Fall:
- Torrent Pharma’s open offer price for JB shares was at a 9% discount to the previous closing price.
- This discount caused the market price of JB Chemicals to fall below the open offer price.
- Comparison with JSW and AkzoNobel Acquisition:
- Impact on Torrent Pharma:
- Post-acquisition, Torrent Pharma will become India’s fifth largest drug maker.
- The acquisition expands Torrent’s product portfolio and market presence significantly.
- Torrent Pharma arranged a large credit line ($2.3 billion) to finance the acquisition.
- Timeline and Process:
- The acquisition process is expected to take 15 to 18 months to complete due to legal and regulatory procedures.
- Investors are advised to be patient and hold through this period.
- Market Insight and Investor Takeaway:
- Investors should be aware of the implications of acquisitions and open offers.
- Market reactions can be counterintuitive; a falling stock during acquisition can be due to open offer discount pricing.
- Understanding these mechanisms helps in making informed decisions during mergers and acquisitions.
Step-by-Step Guide to Understanding Acquisition and Open Offer:
- Identify if a company has acquired more than 25% stake in another company.
- Understand that an open offer must be made to non-promoter shareholders.
- Check the open offer price and compare it with the current market price.
- Analyze whether the open offer price is at a premium or discount.
- Observe the market reaction to the acquisition news.
- Consider the financing method of the acquisition (e.g., loans or credit lines).
- Be aware of the legal timeline for acquisition completion (often 1-2 years).
- Follow broker reports and market analysis post-announcement for price targets.
Presenters / Sources:
- The video is presented by the SM channel, a source focused on stock market news and education for beginners in India.
Category
Business and Finance
