Tale of the Tape 

Howdy folks. Welcome back to the market of stocks!

Nifty and Sensex snapped their four-day gaining streak and ended down -0.5% each. Midcaps (+0.6%) and Smallcaps (+0.5%) however continued their rally. The advance-decline ratio was in favour of the bulls (3:2).

It was a mixed-bag kinda day for sectors. PSU Banks (+2.7%) saw the most buying, followed by Pharma (+0.5%). Real Estate (-0.7%) and  Auto (-0.6%) witnessed selling pressure.

Will Torrent Pharma’s big acquisition of JB Chemicals pay off? Read our top story to get all the deets.

Karnataka Bank fell -6% after its CEO suddenly called it quits. More details below.

Jute stocks dazzled today. Check out their charts below to find out why.

Raymond (+14%) was the top NSE 500 gainer ahead of its real estate arm listing tomorrow.

SBFC Finance gained +5% after Investec initiated coverage; the brokerage sees a +21% upside from current levels.

Jyoti CNC cracked -6% after 1.37 crore shares (6% equity) was traded in a big block deal; reports say a non-promoter entity was the likely seller.

RBL Bank (+4%) gained after Citi put out a bullish call; the brokerage expects lower credit costs to boost return on assets!

Sigachi Industries tanked -11% after a reactor explosion at its Telangana facility killed at least 12 people.

Alembic Pharma was up +5% after receiving USFDA approval for its generic cancer drug.

M&A
Done Deal!

Torrent Pharma (+3%) will buy JB Chemicals for 25,689 cr! This is the second-largest deal in India’s pharma sector and there’s a lot to unpack. So here’s what you need to know:

Deal Contours: Torrent will first acquire a 46.38% stake for Rs 11,917 cr from PE firm KKR. It will also acquire another 2.8% from JB Chemicals employees. As a result, it will launch an open offer for an additional 26% stake at Rs 1,639 p/sh. PS - the two companies will then merge, with JB shareholders receiving 51 Torrent shares for every 100 JB shares that they hold.

State of play: With this deal, Torrent will become India’s 5th largest pharma player. JB’s chronic therapy biz nicely complements Torrent’s offerings. It also has a strong lozenges-led CDMO business which will boost Torrent’s international presence. 

Go deeper: Analysts are divided in their projections. Motilal Oswal, which sees no upside from current levels, says the deal could be dilutive for FY27 earnings IF it is funded fully through debt. Jefferies and HSBC however believe it could unlock a new phase of growth, with the former setting its target price at Rs 3,740 p/sh; +10% upside.

Bittersweet touch: JB Chemicals cracked -7%. This is mostly because the initial deal is at a ~11% discount to Friday’s close. The open offer is also at a 9% discount, which kinda sucks for those wanting to hit the exit door.

Zooming out, it’s important to remember Torrent has a LOT of M&A experience. In the last few years, it’s gobbled up Elder Pharma, Curatio and Unichem to boost its domestic biz. If there’s a player that understands how to make acquisitions work, it’s Torrent.