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Traders at a stockbroking firm in Mumbai (representational image).IANS

The BSE Sensex consolidated its Thursday gains by rallying in early trade on Friday, led by Axis Bank, Tata Motors, Bajaj Auto, Larsen & Toubro and Hero Motocorp. The 30-scrip benchmark index was up 266 points at 28,126 at around 10.37 a.m. while the NSE Nifty was trading at 8,669, up 77 points.

Among corporates that would be declaring their results on Friday, public sector lender State Bank of India (SBI) would be keenly observed for trends on bad loans and provisioning. The SBI stock was down almost 1 percent to Rs. 229.20.

The Thursday rally came after a spell of losses and was driven by smart buying in some counters. "The Indian markets witnessed some positive move backed by short covering. After two days of weak markets bargain hunting helped some relief for market participants," brokerage Angel Broking said in its pre-opening note on Friday.

A day after the Aditya Birla Group announced the merger of two group companies — Aditya Birla Nuvo Ltd. (ABNL) and Grasim Industries Ltd. — the shares of the two entities were trading with losses.

Grasim shares were down 1.17 percent to Rs. 4,485.65 apiece while ABNL plunged 18.35 percent to Rs. 1,278.45. The ABNL stock had crashed almost 25 percent to Rs. 1,180 but recovered later.

On Thursday, the Aditya Birla Group had announced that ABNL would merge into Grasim and its financial services business would be spun off to Aditya Financial Services, which in turn would get listed after the merger exercise is complete.

The Group said as part of the swap ratio, ABNL shareholders would get three equity shares of Grasim for every 10 shares of ABNL and seven equity shares of Aditya Birla Financial Services for every one equity share of Grasim (post merger).

Grasim shareholders will get 700 shares of Aditya Birla Financial Services as part of the merger exercise.

The financial business of ABNL comprises insurance and non-banking finance.

The Group said the merger exercise is expected to be completed by the last quarter of 2016-17/first quarter of 2017-18.