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Focus on India – Indian stocks rise; RBI will raise rates again in June; Adani to become India’s second-largest cement maker with $10.5 billion deal

MUMBAI: Indian stocks surged on Monday after five straight weeks of losses, with Ambuja Cements and unit ACC rising as conglomerate Adani Group said it would buy Holcim AG’s majority stake in the companies.

The NSE Nifty 50 index gained 0.96% to 15,934.40 as of 0510 GMT and the S&P BSE Sensex was up 0.85% to 53,240.26, even as wider Asia struggled. struggling to sustain a slight recovery after incredibly weak data out of China.

On Friday, the Sensex and Nifty marked their longest weekly losing streak since 2020.

RBI to hike rates again in June: Reuters poll

The Reserve Bank of India will follow up its surprise May rate hike with another hike at its meeting next month, according to a majority of analysts polled by Reuters who were unusually divided on the extent of the move.

Retail price inflation in India accelerated to an eight-year high in April, remaining above the central bank’s tolerance limit for the fourth consecutive month, and is expected to remain elevated.

The sudden shift in opinion on soaring inflation and how to bring it under control means that the RBI is likely to bring the repo rate, currently at 4.40%, back to at least its pre-pandemic level in the next quarter and not in 2023 as previously thought.

In the latest Reuters poll, more than a quarter of economists, 14 out of 53, expected the RBI to rise 35 basis points to 4.75% next month, while 20 expected a move higher ranging from 40 to 75 basis points, including ten that forecast a 50 basis point hike.

Twelve respondents expect a modest rate hike (10 to 25 basis points) while seven saw no movement at the June 6-8 meeting.

Adani to become India’s second-largest cement maker

The conglomerate of Gautam Adani, the richest person in Asia, has acquired 63.19% of Ambuja Cements Ltd. and its subsidiary ACC. (AFP)

India’s Adani Group has acquired a majority stake in Holcim AG’s cement operations in India as part of a $10.5 billion deal to become the country’s second-largest cement producer, the Adani Group said in a statement on Sunday. communicated.

The conglomerate of Gautam Adani, the richest person in Asia, has acquired 63.19% of Ambuja Cements Ltd. and its subsidiary ACC in fierce bidding with local businesses.

Ambuja and ACC have a combined capacity to produce at least 70 million tonnes of cement per year, second only to UltraTech Cement which has a capacity of 120 million tonnes.

The Adani family, through an offshore special purpose entity, had entered into definitive agreements to acquire Holcim Ltd’s entire stake in Ambuja and ACC, the Adani Group said in a statement.

Holcim said in a statement that it had signed a binding agreement for Adani Group to acquire Holcim’s business in India, including its stake in Ambuja Cement, which holds a 50.05% stake in ACC, as well as its stake direct 4.48% in ACC. Holcim would receive nearly $6.4 billion for stakes.

Adani Group said it would acquire more shares through an open offering.

The transaction is expected to close in the second half of 2022, Holcim said.

(Contributed by Reuters)