Reliance Boosts FMCG Play

Aaj Ka Bazaar

Indian equity benchmark indices are expected to open positively, with GIFT Nifty futures trading at 25,360, up by 100 points. Global markets faced mixed performance, with US indices ending Wednesday's session on a mixed note due to lower-than-expected July job openings, fueling hopes for a September rate cut. Treasury yields fell on labour market data, while Asia-Pacific markets mostly rebounded, except Japan. Investors are closely watching the upcoming US nonfarm payroll report for further clues on interest rate decisions. In stock-specific news, TARC will be in focus as it received a registration certificate for its luxury project, TARC ISHVA, in Gurugram from the Haryana RERA.

Markets Around Us?

BSE Sensex - 82,353.27 (0.01%)

Nifty 50 - 25,204.05 (0.02%)

Bank Nifty - 51,455.65?(0.11%)

Dow Jones - 40,927.59 (-0.12%)

Nasdaq - 17,084.30 (-0.30%)

FTSE - 8,269.60 (-0.35%)

Nikkei 225 - 36,690.31 (-0.95%)

Hang Seng - 17,376.86 (-0.46%)

Sector: FMCG

Reliance readies war chest to fight FMCG giants

Reliance is set to invest up to ?3,900 crore in its FMCG arm, Reliance Consumer Products (RCPL), through a mix of equity and debt to compete with major players like Hindustan Unilever, ITC, Coca-Cola, and Adani Wilmar in the Indian FMCG market. At a board meeting in July, RCPL approved raising capital for business operations, marking its largest infusion since the unit's launch in 2022. RCPL has increased its authorized share capital to ?100 crore and received approval to borrow up to ?3,000 crore beyond its paid-up share capital. Additionally, it plans to issue up to 775 million convertible debentures worth ?775 crore. This move signals RCPL's plans for expansion, acquisitions, or product development. RCPL previously raised ?792 crore in debt capital in FY24 and ?261 crore in FY23 through debentures.?

Why it Matters:

With this capital infusion, Reliance aims to build a stronger presence in the competitive Indian FMCG market, potentially leading to increased revenue and shareholder value.

NIFTY 50 GAINERS

ULTRACEMCO - 11,795.00?(1.85%)

TITAN - 3,653.15?(1.26%)

SHRIRAMFIN - 3,282.30?(1.18%)

NIFTY 50 LOSERS

HDFCLIFE - 752.90 (-0.78%)

NESTLEIND - 2,518.75 (-0.63%)

HCLTECH - 1,774.55?(-0.60%)

Sector: FMCG

Britannia on a shopping spree

Britannia Industries is in talks to buy a controlling stake in Kishlay Foods, a Guwahati-based snacks and biscuits maker, valued at ?600-700 crore. Kishlay Foods, known for brands like Non-Stop, Kishlay, and Mamooz, is a leading snack manufacturer in Northeast India. The company had revenue of ?350 crore in FY23. If the deal goes through, it would give Britannia access to the Northeast market and allow it to enter new product categories like noodles and tea. Britannia is keen on the acquisition to strengthen its position in the fast-growing snacks market, where competition from regional brands has intensified. Kishlay Foods has a strong distribution network in the Northeast, serving over 46 million consumers. This potential acquisition aligns with Britannia's growth strategy, which recently saw them expand into Africa by acquiring a stake in Kenafric Biscuits in Kenya.

Why it Matters:

The potential deal aligns with Britannia's strategy to expand both domestically and internationally. After its acquisition of Kenafric Biscuits in Kenya, this move could drive further long-term growth and increase investor confidence in Britannia’s future earnings potential.

Around the World

Asian markets attempted to recover on Thursday after recent steep losses, while a rally in U.S. Treasuries weakened the dollar and boosted the yen, as concerns about the U.S. economy increased expectations of larger Federal Reserve rate cuts. Oil prices stabilized after earlier drops, and gold edged higher. Investors are analysing U.S. economic data, including weak manufacturing and mixed labour reports, to gauge the Fed's next move on interest rates. Japan's Nikkei dropped 0.5%, while Taiwan and South Korea's tech-heavy markets rose 1%. Focus now shifts to U.S. services and jobless claims data, with the key August nonfarm payroll report coming on Friday. Markets are currently pricing in a 44% chance of a 50-basis-point rate cut in September, up from 38% the previous day. The Japanese yen strengthened, benefiting from safe-haven demand, while U.S. Treasury yields steadied after a sharp fall. Brent crude oil rose slightly after recent declines.

Option Traders Corner

Max Pain

Nifty 50 - 25,200

Bank Nifty - 53,100

Nifty 50 - 25,166 (Pivot)

Support - 25,116, 25,033, 24,984

Resistance - 25,248, 25,298, 25,380

Bank Nifty - 51,387 (Pivot)

Support - 51,272, 51,144, 51,028

Resistance - 51,515, 51,631, 51,759

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