Escorts rallies as new JV commences production
Shares of tractor maker Escorts Limited gained 7.5% after the company announced that its joint venture (JV) with Kubota Corporation (Japan) has begun commercial production from 25 September. The Escorts-Kubota (40:60) JV has a production capacity of 50,000 units per year and aims to develop new products. Tractors are the only segment in the auto sector that was largely unaffected during the Covid-19 pandemic. Over June, July and August 2020, Escorts’ tractor sales grew 23%, 10% and 79%, respectively on a year-on-year basis.
IPO market buzzing with three new public offers
Let’s wind back to August 2020. It was a virtual drought in the IPO market with only two public offers in the first eight months of the year. September, on the other hand, has witnessed a deluge of IPOs, with five public issues concluded and three more launching tomorrow. First, UTI AMC (the second-largest AMC in India by total assets under management) plans to raise ₹2,160 crore primarily to provide an exit to selling shareholders. Second, Mazagon Dock Shipbuilders, which will raise ₹443 crore through its public offer, is one of India’s leading defence public sector undertakings. The IPO will help the central government to further its divestment plans. Finally, Likhitha Infrastructure, which plans to raise ₹61 crore, is in the business of laying oil and gas pipelines for companies such as Indian Oil, GAIL and ONGC.
Multiplex stocks rise as WB opens cinema halls
It’s show time for multiplexes… well, sort of. The West Bengal government has allowed cinema halls to resume operations from 1 October. While this is definitely a positive development for multiplex operators such as PVR (+11.1%) and Inox (+5.8%), there are caveats. Hall capacity will be restricted to 50 viewers, who must adhere to social-distancing norms. Further, it remains to be seen whether other states will follow suit. Till that happens, major production houses may continue to postpone big-ticket releases.