Shares of India’s Tata Coffee surged up to 12% on Wednesday after parent Tata Consumer Products said it would streamline its coffee business by merging the company with itself.
Tata Consumer said in a stock exchange filing that the plantation business of Tata Coffee would be included in Tata Consumer Products’ beverages and foods unit, which is known for the Tetley and Tata Tea brands.
The remaining business of Tata Coffee, which houses extraction and coffee brands, would combine with Tata Consumer.
Analysts at Nomura said they believed the merger would add to Tata Consumer’s earnings by 3-4%, while also improving the company’s supply chain.
Tata Coffee, which makes instant coffee, pepper and tea, was up 10.5% at 216.90 rupees in morning trading, while Tata Consumer climbed 4.7%.
More broadly, Indian shares rose to their highest since mid-February on Wednesday, led by gains in carmakers and heavyweight financials, as appetite for risky assets improved globally on signs of progress in Ukraine-Russia peace talks.
The NSE Nifty 50 index climbed 0.72% to 17,449.75 while the S&P BSE Sensex rose 0.81% to 58,412.47, with both indices on track for a third straight day of gains.
Most global equity markets reacted positively to Russia’s promises on Tuesday to scale down its military operations near Kyiv and surrounding cities.
“The market mood is seen improving considerably in early trades amid progress in Russia-Ukraine peace talks and oil prices falling,” Prashanth Tapse, vice president at Mehta Equities, wrote in a note.
India’s blue-chip indexes have more than recovered their losses that were triggered by a spike in oil prices following Russia’s invasion of Ukraine.
Meanwhile, MSCI’s broadest index of Asia-Pacific shares outside Japan is still nearly 4% below levels seen before the invasion.
- Reuters, with additional editing by George Russell