Future Supply Chain gains after Nippon Express gets CCI nod to buy 22% stake

Future Supply Chain Solutions rose 1.59% to Rs 509.35 after the Competition Commission of India on Tuesday approved the proposed acquisition of 22% stake in the company by Nippon Express (south Asia & Oceania).

In September, Nippon Express Co., acting through its subsidiary Nippon Express (South Asia & Oceania) (Nippon Express), Japan's leading global logistics player, agreed to acquire a 22% stake in Future Supply Chain Solutions (FSC). This transaction is a combination of primary issuance and secondary purchase from an existing investor.

Nippon Express and FSC plan to explore synergies between the two organizations. FSC and Nippon Express will jointly evaluate leveraging Nippon Express' competency in diverse sectors for the Indian market. FSC plans to leverage Nippon Express' Japanese and MNC clients for exploring new business opportunities in India, especially for 3PL and express logistics operations. Nippon Express will also have representation on FSC's Board of Directors, which will further strengthen its Board through their strategic direction.

Shares of Future Supply Chain Solutions jumped 7.83% in two trading sessions to its current market price of Rs 509.35 from its recent closing low of Rs 472.35 on Monday, 9 December 2019.

Meanwhile, the S&P BSE Sensex was up 101 points or 0.25% to 40,341.13.

On the technical front, the stock's RSI (relative strength index) stood at 59.097. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock was currently trading above its 50-day moving average (DMA) placed at Rs 498.52, but still below its 200 DMA placed at Rs 558.87.

On a consolidated basis, Future Supply Chain Solutions' net profit slumped 85.9% to Rs 2.73 crore on 0.8% rise in net sales to Rs 312.45 crore in Q2 September 2019 over Q2 September 2018.

Future Supply Chain Solutions offers automated and information technology enabled warehousing, distribution and other logistics solutions to the customers. It offers its customer services in three areas: Contract Logistics, Express Logistic And Temperature-Controlled Logistics.

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