Retail investors bullish despite plunge in stocks ACC, Ambuja shares rally after Holcim deal

MUMBAI: If bets in the futures market are any guide, India’s retail investors remain optimistic about equities despite a 14% plunge in the nation’s stock market from a record high hit last year.

The ratio of outstanding longto-short positions in single stock futures is at 6.74 times versus a 10-year mean of 3.74, according to data compiled by Bloomberg.

While that’s down from about 10.4 in January, the fact it remains elevated could point to the risk that retail investors are too optimistic and vulnerable to disappointment from an array of threats.

The still-elevated ratio shows “retail traders remain sanguine despite the fall” in stocks this year, said Shrinivas Balasubramanian, director of institutional equity sales trading at JM Financial Institutional Securities Ltd. It also signals complacency and hence a possible risk for stocks if the mood sours, he said.

NEW DELHI: Shares of ACC and Ambuja Cements were in huge demand on Monday after Gautam Adani’s group clinched a deal to acquire a controlling stake in Holcim Ltd’s businesses in India for $10.5 billion.

The stock of ACC jumped 3.70% to settle at ₹2,192 on the BSE. During the day, it rallied 7.79% to ₹2,288.15. Shares of Ambuja Cements ended at ₹368.10, up 2.59%. During the day, it gained 5.21% to ₹377.50.

Gautam Adani’s group on Sunday said it has clinched a deal to acquire a controlling stake in Holcim Ltd’s businesses in India for $10.5 billion, marking the ports-to-energy conglomerate’s entry into the cement sector.

The Adani Group will acquire 63.1% of Ambuja Cements Ltd along with related assets. Ambuja’s local subsidiaries include ACC Ltd.

“The Adani Family, through an offshore special purpose vehicle, announced that it had entered into definitive agreements for the acquisition of Switzerland-based Holcim Ltd’s entire stake in two of India’s leading cement companies Ambuja Cements Ltd and ACC Ltd,” the group said.

Holcim, through its subsidiaries, holds 63.19% in Ambuja Cements and 54.53% in ACC (of which 50.05% is held through Ambuja Cements).

“The value for the Holcim stake and open offer consideration for Ambuja Cements and ACC is $10.5 billion, which makes this the largest-ever acquisition by Adani,” the group said.