Market movers: Biocon plunges 11%, Shankara Building jumps 10%

NEW DELHI: Indian investors are becoming more sensitive to corporates taking big debts to acquire foreign firms. They have seen what mess it can create in cases of various acquisitions of Tata Group.

Thus, when Biocon said it will buy US-based Viatris Inc's biosimilars business in a transaction valued at $3.34 billion that will increase debt on its books, the market did not take it kindly. As per the deal, Viatris will get up to $2.34 billion in cash, and convertible shares in Biocon Biologics worth $1 billion.

"There is no proof... on whether Biocon can execute commercial marketing of biosimilars in the US and European markets and globally," said Vishal Manchanda, research analyst at Nirmal Bang Institutional Equities. "They have spent humongous money in taking up this (commercialisation) challenge, while at the same time also taking up debt."

Biocon ended the day down over 11 per cent.

Building synergy?
Shares of Shankara Building Products, which makes and markets building materials, zoomed about 10 per cent on BSE after reports emerged that the company may sell a significant stake to its peer.

ET Now said citing reliable sources that Shankara Building is in talks with APL Apollo for fundraising. The latter may pick up 10 per cent stake in the target company for Rs 160-170 crore. This puts the pricing in range of current market valuations.

Both companies did not comment on the report.

Russian reduction?
The Russian economy is staring at a deep impact of the sanctions imposed by western nations on the country after it invaded Ukraine. In the medium term, it is likely to be isolated from regular trading channels.

The immediate impact of sanctions on the Russian financial system was evident on some of the chemical sector companies that export to and import from Russia.

Aarti Industries, Fine Organic, Sudarshan Chemical Industries, SRF closed with losses up to 3 per cent. At the same time, Astec LifeSciences that exports APIs rose nearly 4 per cent.

Smelling an open offer!
Apparently investors of Eveready Industries smelled the open offer floated by its acquirers — Burman family — even before the company announced it, and the stock rocketed 10 per cent.

The family said it will acquire further 26 per cent in Eveready Industries at Rs 320 per share. The pricing is lower than the current market price of Rs 375. This makes it unfavourable for investors to tender shares in the open offer.