Connect with us
Thursday,05-November-2026
Breaking News

Business

Possible inability of conglomerates to face disruption reflected in market discomfort

Published

on

The large discounts to fair values in the case of conglomerate stocks reflect the markets general discomfort with capital allocation and diversification associated with such structures, the Kotak Institutional Equities said in a report.

However, a bigger issue may be possible inability of conglomerates to face disruption. It remains to be seen if recent de-merger announcements by large global conglomerates will provide sufficient inspiration to majority shareholders and managements of Indian conglomerates to evaluate similar de-mergers, the report said.

The report said the recent de-merger announcements by large global conglomerates may reflect two factors growing challenges of managing diverse businesses in an increasingly disrupted world and increasing gap between market capitalization and SoTP value of conglomerates leading to rising shareholder frustration.

The managements of these companies probably acquiesce with the former in that individual companies may have better chance to create value through increased management focus on individual businesses. Activist shareholders have taken note of the latter and are challenging company managements to ‘unlock’ value through de-mergers/splits, the report said.

The shareholders (majority or minority) of Indian conglomerates appear to be agnostic to the disruption across industries that could pose challenges to the business models of the weaker businesses in diversified conglomerates and accepting of the large discount to the fair values of various businesses in the parent entity or subsidiaries. India is yet to see any major shareholder activism given the majority or large ownership of majority shareholders, the report said.

“We note that several Indian conglomerates trade at large discounts to the fair value of their individual businesses in the parent or in subsidiaries. The implied P/E or market capitalisation of the main businesses in the parent entities appear to be quite low after adjusting for the market value of the companies’ holdings in their subsidiaries or associates. We note that current large holding company discounts may also be the result of the steep increase in market capitalization of subsidiaries in several cases; they may well be over-valued,” the report said.

The majority shareholders of conglomerates with a mix of unrelated businesses may want to reconsider the ownership structure of their companies and review their business mix given that the market is unlikely to accord the fair value of the businesses in the market capitalization of the holding/operating company, the report said.

The inability of companies to survive and thrive in many different businesses simultaneously in an increasingly ‘disrupted’ world should force a rethink among majority shareholders about the ‘financial’ (control) benefit of continuing with such structures versus potential irrelevance in many businesses in the future and the market’s reluctance to give value to the businesses at present anyway, it added.

Business

Sensex, Nifty open up to 2 pc higher after US election outcome, falling crude oil

Published

on

Indian equity markets opened higher on Thursday with benchmarks jumping about 2 per cent each tracking strong global cues after the outcome of the US midterm elections and a sharp decline in crude oil prices.

Sensex opened at 78,910.94, an increase of 1,609.54 points or 2.08 per cent. Similarly, Nifty began the trading session at 24,378.05, up 417.45 points or 1.74 per cent.

In early trade, financial stocks led gains with Nifty Private Bank surging more than 2 per cent. Meanwhile, Nifty Realty gained 1.86 per cent. However, all sectoral indices were trading in the positive territory.

Other sectoral performers, Nifty Cement, Nifty Auto, Nifty IT, Nifty Oil & Gas and Nifty PSU Banks climbed up to 1.82 per cent.

FMCG, consumer durables, metal, media and chemicals also traded in positive territory, rising between 1 per cent and 1.5 per cent.

Market experts said the Nifty continued to maintain its position above the 200-day exponential moving average (EMA) near 23,904, reinforcing a positive technical setup.

“The RSI has climbed to 68.55, indicating strong momentum, although the possibility of near-term profit booking cannot be ruled out,” analysts said. Immediate support is seen in the 24,000-24,200 zone, while resistance is placed between 24,500 and 24,700.

The experts also noted that after the initial reaction to the US election results weakens, there will be concerns surrounding prolonged political conflict in the US, since US President Donald Trump being what he is, is likely to turn Mr Veto rather than lame duck president.

On Wednesday, foreign institutional investors (FIIs) extending their buying streak for a fourth straight session. FIIs were net buyers of equities worth Rs 7,284 crore. Domestic institutional investors (DIIs), however, continued to pare holdings, recording net sales of Rs 3,712 crore for the fourth consecutive day.

Global markets provided additional tailwinds after US equities registered sharp gains overnight. The Dow Jones Industrial Average jumped more than 3 per cent, marking its strongest post-midterm election performance in over four decades. The S&P 500 and Nasdaq Composite also rose more than 1.4 per cent each as election uncertainty faded following a clear Democratic sweep of both chambers of Congress.

Meanwhile, energy markets witnessed heavy selling pressure as Brent crude tumbled nearly 10 per cent to settle below the $100-per-barrel mark.

US Treasury yields also eased, with the benchmark 10-year yield retreating to around 4.89 per cent, further supporting risk assets globally.

Market mood was further supported by easing geopolitical concerns surrounding Iran and a weaker US dollar which boosted appetite for risk assets across global markets.

Continue Reading

Business

Weaker Republican showing could reshape US trade policy outlook: Expert

Published

on

A weaker-than-expected performance by the Republican Party in the US midterm elections could reignite debate over the future direction of American trade policy and influence ongoing trade negotiations with India, experts said on Wednesday.

According to Tanay Dalal, Senior Vice President (Business & Economic Research) at Axis Bank, changes in the composition of the US Congress are unlikely to significantly alter the institutional framework governing current trade negotiations. He noted that any attempt to restore Congress’s authority over trade policy would require a veto-proof majority, a scenario that remains unlikely.

Dalal added that the scope for aggressive trade actions could gradually diminish amid a divided government in the United States and growing political constraints on the administration.

However, uncertainty is expected to persist due to ongoing legal challenges to existing tariff measures.

For India, the situation remains complex, he said. Geopolitical developments, particularly the war in Ukraine and tensions in the Middle East, are likely to continue shaping US trade policy.

As a result, even if Washington adopts a less aggressive stance on tariffs, India may not necessarily benefit.

The country could still face targeted US trade restrictions in areas where strategic and geopolitical interests diverge.

Meanwhile, commodity markets witnessed significant volatility following the Democrats’ victories in both the House and Senate.

Crude oil prices declined, with benchmark Brent crude falling 1.19 per cent to $102.39 per barrel and WTI crude slipping 0.78 per cent to $95.31 per barrel at the time of writing.

In contrast, precious metals gained. On COMEX, gold rose 2.72 per cent to $4,047 per ounce, while silver advanced 4.22 per cent to $51.85 per ounce.

Meanwhile, in other development, Indian officials reacted cautiously to the US midterm election results, saying the outcome could ease some pressure arising from trade tensions but also introduces fresh uncertainty into an already delicate bilateral relationship.

The Democratic Party secured sweeping victories in both chambers of the US Congress, delivering a significant setback to President Donald Trump.

His administration’s tariff policies and confrontation with Iran have had significant implications for countries such as India, which relies on the US as its largest export market and sources a substantial portion of its crude oil requirements from the Middle East.

Continue Reading

Business

ED raids 10 locations in Delhi-NCR, Haryana, Punjab in imported liquor tax evasion case

Published

on

The Directorate of Enforcement (ED) has conducted search and seizure operations at 10 locations across Delhi-NCR, Haryana, and Punjab in connection with a money laundering investigation linked to the alleged illegal procurement and sale of imported foreign liquor through Gurugram-based liquor vend chain ‘The Theka’.

The searches, carried out by the ED’s Gurugram Zonal Office on Tuesday and Wednesday under the PMLA, covered offices and residences of individuals associated with ‘The Theka’, foreign liquor suppliers, transporters, and others allegedly involved in the liquor syndicate.

According to the ED, the investigation stems from FIRs and charge sheets filed by Haryana Police over allegations of illegal sale of imported foreign liquor and misuse of the bond-to-bond transfer mechanism to evade customs duties and state excise taxes.

The case originated from a complaint by Excise Department officials, who seized 3,921 cases and 176 loose bottles of imported foreign liquor allegedly lacking mandatory holograms and Track & Trace strips from ‘The Theka’ on December 9, 2025. Another FIR was also registered against members of the syndicate for alleged involvement in the sale of spurious liquor.

The ED said its probe revealed that the syndicate exploited the bond-to-bond transfer system, which permits movement of imported liquor between states without immediate payment of customs and excise duties. To facilitate the operation, separate companies were established in Haryana and Goa/Maharashtra and requisite customs licences obtained.

While the liquor was officially meant to be transported to bonded warehouses in Goa or Maharashtra, investigators found that consignments were diverted in connivance with transporters and supplied directly to liquor vends in Gurugram. The liquor was then sold as legitimate imported stock, enabling the syndicate to evade customs duties, VAT, cesses, and other taxes.

The agency alleged that after securing a liquor licence for the 2025-27 period, the syndicate procured and sold imported liquor without holograms and Track & Trace strips to increase profits. More than one lakh bottles of imported liquor were procured and illegally sold between June and November 2025.

According to the ED, the operation yielded profits of 20-25 per cent on illegal sales and generated proceeds of crime exceeding Rs 10 crore.

During the searches, officials recovered and seized incriminating documents, digital records relating to the procurement and movement of imported liquor under customs bond arrangements, and cash amounting to Rs 11 lakh.

Further investigation is underway.

Continue Reading

Trending