IPO, FPO http://ak57.in Primary Capital Market & Investor Awareness Wed, 14 Jun 2017 09:26:49 +0000 en-US hourly 1 Tejas Networks Limited – Completes allocation to anchor investors http://ak57.in/general/tejas-networks-limited-completes-allocation-to-anchor-investors/8633/ http://ak57.in/general/tejas-networks-limited-completes-allocation-to-anchor-investors/8633/#respond Wed, 14 Jun 2017 09:13:35 +0000 http://ak57.in/?p=8633 Tejas Networks Limited which is tapping the capital markets with its simultaneous issue comprising of a fresh issue of Rs 450 crs and an offer for sale of 1.27 cr shares in a price band of Rs 250-257 completed allocation to anchor investors. The price band of the issue is Rs 250-257. The company allocated 1,35,99,600 equity shares at Rs 257 to 17 anchor investors comprising of 18 entities. The issue would garner approximately Rs 785 crs at the top end of the band. The issue comprises of 75% allocation to anchor investors, 15% to HNI’s and 10% to retail investors. The company is in the business of supplying and maintaining components in the telecom space which is currently seeing huge stress with the entry of Reliance Jio in the space. Balance sheets of various telecom providers are under stress and it’s become a tough market. Secondly the competitors for Tejas are MNC’s with deep pockets and significantly lower cost of manufacturing due to multi location and large scale operations. Thirdly the prospects of the IT industry and the IT services industry are currently under pressure and the industry is out of favour.

From an investor perspective the issue looks un-reasonably priced and expensive with the PE Ratio at a steep 26.60 times at the lower band and 27.34 times at the upper band. The benchmark indices currently trade around 21 times. Why an out of favour sector should quote at a premium baffles me.
The full list of anchor investors and their allocation is given below:-

3 Mutual Funds have applied through a total of 4 schemes, scheme-wise details provided in the table below:-

]]>
http://ak57.in/general/tejas-networks-limited-completes-allocation-to-anchor-investors/8633/feed/ 0
India Grid Trust – allocates shares to anchor investors http://ak57.in/general/india-grid-trust-allocates-shares-to-anchor-investors/8626/ Wed, 17 May 2017 06:34:18 +0000 http://ak57.in/?p=8626 India Grid Trust which is tapping the capital markets with its issue to raise Rs 2,250 crs in a price band of Rs 100-102 competed allocation to anchor investors. A total of 12,43,520 units werew allotted to 17 anchor investors comprising of 19entitie at Rs 102 per unit. The highest allotment was made to BNP Paribas who were allotted 21% of the anchor allotment followed by Deutsche Global Infrastructure Fund with 17%.

The issue opens on Wednesday the 17th of May and closes on Friday the 19th of May. The lot size id 10,206 units and 5,103 units thereafter. 75% of the issue is reserved for QIB’s and the balance for non-QIB. This would be the second such trust offering after the success of IRB which would be listing on Thursday the 18th of May.

table_1

]]>
PSP Projects Limited – Completes allocation to anchor investors http://ak57.in/general/psp-projects-limited-completes-allocation-to-anchor-investors/8615/ Wed, 17 May 2017 06:29:07 +0000 http://ak57.in/?p=8615 PSP Projects Limited which is tapping the capital markets with its simultaneous fresh issue of 72 lakh shares and an offer for sale of 28.80 lakh shares completed allocation to anchor investors. The price band is Rs 205-210. The company allotted 45.36 lakh shares to 9 anchor investors comprising of 22 entities at Rs 210 shares.

The issue has an allocation of 75% for QIB’s, 15% for HNI’s and 10% for retail investors. The issue opens on Wednesday the 17th of May and closes on Friday the 19th of May.

The full list of anchor investors and entities is given below: –

table_1

]]>
Primary markets continue to be in demand – Secondary markets at new highs http://ak57.in/general/primary-markets-continue-to-be-in-demand-secondary-markets-at-new-highs/8610/ Mon, 15 May 2017 06:42:08 +0000 http://ak57.in/?p=8610 Markets were on a roll last week and continued making new highs with the BSESENSEX gaining 329.35 points or 1.10% to close at 30,188.15 points. NIFTY gained 115.60 points or 1.24% to close at 9,400.90 points. So strong was the market breadth that there was just one sectoral loser in BSEPSU down 0.29%.

The action though seems largely concentrated in the primary market space. There was last week the issue from Hudco which was very well received. The issue opened on Monday the 8th of May and closed on Thursday the 11th of May and was oversubscribed 79.55 times. The issue was for 20.40 cr shares in a price band of Rs 56-60. The QIB portion was subscribed 55.45 times, HNI 330.36 times and Retail 10.79 times. What is heartening to note that the share received applications from 20.13 lakh investors and created a new record beating the previous one of 19.75 lakh application in D-Mart. What is really heartening from a capital market perspective is that these new investors are coming from Tier2 and Tier3 towns. New demat accounts of over 3 lakh investors have been opened in the last couple of months. Also the SIP flow into mutual funds is now Rs 4,200 crs monthly. A large portion of the incremental flows is again from these same towns.

Shares of S Chand and Company Limited listed on Tuesday the 9th of May and just about survived a big scare, managing to close with minor gains of about one percent. The share issue was very heavily subscribed with HNI portion subscribed a massive 204.65 times. The overall issue was subscribed 59.49 times. At close of the week the share closed at Rs 622.05, down Rs 47.95 or 7.15%. One wonders what ails the education sector with issue after issue failing to rise upto expectations. The previous issue was from C L Educate which continues to trade below the issue price.

The week ahead sees the issue from PSP Projects Limited which opens on Wednesday the 17th of May and closes on Friday the 19th of May. The company is raising between Rs 206.64 crs to Rs 211.68 crs in a price band of Rs 205-210. The company is into the business of construction and is a contractor developing special projects in Gujarat particularly Ahmedabad.

After the runaway success of India’s first ever INVIT, is the issue during the week from India Grid Trust which opens this Wednesday the 17th of May and closes on Friday the 19th of May. The trust is raising Rs 2,250 crs in a price band of Rs 98-100. The lot size is 10,206 units and in multiples thereafter of 5,103 units. The success of IRB invit is unlikely to be seen in the this issue because of one fundamental difference where the returns to investors in the issue of India Grid in the initial few years would be entirely by way of interest income while in the case of IRB it was a combination of interest and dividend. The interest component was initially to be higher and then reduce as time went by. The interest income would attract tax for individuals and therefore reduce the net returns from the product. By Friday we would know the overall response to the issue which is into transmission lines and offers the investor an asset with income earning capacity for over 30 years. This issue would be closely watched as the listing of IRB is probably going to happen on Thursday the 18th of May.

Strange things seem to be happening in Shilpi Cable. The company on 11th May informed the exchange that the board would meet for issue of bonus shares on 28th May. This notice was issued at 14.28 hrs. At 15.20 hrs it issued a notice that the Company secretary has resigned with effect from 1st May. At 16.07 it issued a notice that the CFO has resigned with effect from 1st May. At 16.14 it issued a notice that the independent director has resigned with effect from 3rd May. The timing of the bonus issue and the resignations raise lot of question marks. One hopes the regulator looks into the same before it’s too late. The share price in recent times has fallen from Rs 225.60 on the 20th of April to Rs 67.45 on Friday the 12th of May.

Markets are likely to continue their upward momentum and there would be bouts of selling in the middle as well. Use rallies to exit and corrections to enter.

]]>
Performance of Newly Listed Shares as on 12th May 2017 http://ak57.in/weekly-performance/performance-of-newly-listed-shares-as-on-12th-may-2017/8607/ Mon, 15 May 2017 06:37:33 +0000 http://ak57.in/?p=8607 Name Date of listing Issue Price closing price closing price % gain loss change over 12th May 5th May over week lssue price Sheela Foam Limited 9th December 730.00 1321.42 1374.40 -7.29 80.99 Laurus Labs Limited 19th December 428.00 556.60 556.85 -0.06 30.05 BSE Limited 3rd February 806.00 981.80 995.10 -1.65 21.81 Music Broadcast Limited 17th March 333.00 340.25 349.25 -2.70 2.18 Avenue Supermarts Limited 21st March 299.00 751.45 808.65 -19.13 151.32 CL Educate Limited 31st March 502.00 450.65 441.45 1.83 -10.23 Shankara Building Products Limited 5th April 460.00 705.75 704.55 0.26 53.42 S Chand and Company Limited 9th May 670.00 622.05 NA -7.16 -7.16 ]]> HUDCO Issue subscribed over 79 times – Retail subscription at new high http://ak57.in/general/hudco-issue-subscribed-over-79-times-retail-subscription-at-new-high/8605/ Fri, 12 May 2017 10:13:11 +0000 http://ak57.in/?p=8605 The offer for sale from HUDCO was oversubscribed 79.53 times. The company had tapped the capital markets with its offer for sale of 20.40 cr shares in a price band of Rs 56-60. Retail and employees were offered a discount of Rs 2 per share. Retail subscription saw a new record with 20.13 lakh applications. This beat the previous best in the issue of Avenue Supermarts the company which runs the D-Mart chain of stores which had received 18.75 lakh subscriptions.

The new applicants are coming from Tier-2 and Tier-3 towns and this trend is also being witnessed in mutual funds where SIP’s have reached a level of 4,200 crs. The other confirmation of this fact is that the total retail subscription was 10.79 times while in terms of applications it was 5.75 times. This number of 10.79 times means that people have applied for more than one lot which would be from first time or nee applicants who are not aware of allotment.

The subscription in the HNI category was 330.36 times and it garnered subscription of almost Rs 60,000 crs. The cost of interest for the leveraged investor assuming 6% interest is Rs 22.78 per share. The share needs to trade above Rs 85 if the HNI is to make even token profit in his application.

Bucket Size Shares Applied for Times oversubscribed
QIB 100095000 5550374000 55.45
HINI 30028500 9920235800 330.36
Retail 70066500 755896600 10.79
Employee 3868747 2860600 0.74
Total 204058747 16229367000 73.53

This cost of funding would be the comfort factor for the lucky retail investor who gets allotment.

]]>
Primary markets to dominate http://ak57.in/general/primary-markets-to-dominate/8600/ Mon, 08 May 2017 06:24:55 +0000 http://ak57.in/?p=8600 Markets had a poor show on Friday and the weakness pulled the markets into negative territory for the week. Friday saw losses of more than 0.75% and the gains made the previous day were wiped out. The BSESENSEX ended with losses of 59.60 points or 0.20% to close at 29,858.80 points. NIFTY lost 18.75 points or 0.20% to close at 9,285.30 points. Metal and pharma sectors were under pressure.

All the action seems to have shifted to the primary market where we saw the first INVIT issue from IRB open and close for subscription. This week we have the issue from HUDCO and the listing of S Chanda and Company on Tuesday.

The issue from IRB INVIT received excellent response and was oversubscribed 8.57 times. The issue garnered support of Rs 24,000 crs in all and as many as 62,275 applications were received. In terms of minimum lots itself the non-QIB portion is subscribed 5.46 times.

Government of India owned HUDCO is tapping the capital markets with its offer for sale of 20.40 cr shares in a price band of Rs 56-60 to raise Rs 1,142-1,224 crs. There is a discount of Rs 2 for retail shareholders and also eligible employees. Coming from the government and being in the housing space, the issue is expected to garner lot of attention and would be oversubscribed many times over.

The issue from S Chand and Company would list on Tuesday the 9th of March. The issue had received excellent response and was oversubscribed 59.49 times with HNI portion subscribed 204.65 times. This would be the first stock in the education sector which would be making money for investors in recent times. Earlier issues like C L Educate, MT Educate and even Career Point disappointed market participants.

Result season is currently on and there seems to be no clear trend emerging so far. Some results are good and some bad. While the worst is certainly over the extremely rich valuations which the market is currently enjoying needs to correct. The way that can happen is for earnings to improve or share prices to come down. Earning improvement is likely to take another one to three quarters which leaves the other option that prices need to consolidate at current levels.

I believe nothing significant would happen in markets in the near term. While liquidity would ensure that prices do not fall too sharply, any sharp rise would result in profit taking. This would ensure that markets trade in a fairly broad range allowing traders to have a field day.

Enjoy the movement and wait for sharp movements to enter or exit the market.

]]>
IRB INVIT receives excellent response – oversubscribed 8.57 times http://ak57.in/general/irb-invit-receives-excellent-response-oversubscribed-8-57-times/8596/ Mon, 08 May 2017 06:22:33 +0000 http://ak57.in/?p=8596 The issue from IRB INVIT received excellent response on expected lines and finally even bettered expectations and was oversubscribed 8.57 times. It garnered support in the QIB category of 10.81 times and in the non QIB category of 5.89 times. The total response saw Rs 24,000 crs being raised. This is the first of its kind product and it took a long time in coming. It finally saw the day of light after various government bodies including the Finance Ministry, NHAI, SEBI and the ministry of roads came together.

The instrument is a hybrid instrument and is a combination of interest and dividend. The holder of units would get both streams of income with the interest component being higher at beginning and then reducing. The company is expected to distribute 90% of income to unit holders twice a year as per SEBI rules. However IRB plans to do it four times a year. This would ensure a steady flow of income to unit holders.

While the application was for 10,000 units, the trading lot would be 5,000. The returns as calculated by the company talk about 12.4% for institutional investors they talk about 10% for non-institutional investors. Even considering the tax to be paid on the interest component this would be better than the FMP products in the market and also the tax free bonds.

Bucket Size Shares Applied for Times oversubscribed
QIB 136907797 1479450000 10.81
Non QBI 114082600 671995000 5.89
Total 250990397 2151445000 8.57

While this is the first product to hit the market many more are expected in coming days and months from the transmission sector, real estate sector and commercial space owners.

Great start to a great product.

]]>
Performance of Newly Listed Shares as on 5th May 2017 http://ak57.in/weekly-performance/performance-of-newly-listed-shares-as-on-5th-may-2017/8592/ Mon, 08 May 2017 06:08:24 +0000 http://ak57.in/?p=8592 Name Date of listing Issue Price closing price closing price % gain loss change over 5th May 28th April over week lssue price Varun Beverages Limited 8th November 445.00 484.40 470.85 3.04 8.85 Sheela Foam Limited 9th December 730.00 1374.40 1292.20 11.26 88.27 Laurus Labs Limited 19th December 428.00 556.85 518.45 8.97 30.11 BSE Limited 3rd February 806.00 995.10 1004.45 -1.16 23.46 Music Broadcast Limited 17th March 333.00 349.25 349.10 0.05 4.88 Avenue Supermarts Limited 21st March 299.00 808.65 736.50 24.13 170.45 CL Educate Limited 31st March 502.00 441.45 456.55 -3.01 -12.06 Shankara Building Products Limited 5th April 460.00 704.55 703.10 0.32 53.16 ]]> IRB INVIT and interesting and compelling offering http://ak57.in/general/irb-invit-and-interesting-and-compelling-offering/8586/ Thu, 04 May 2017 07:13:35 +0000 http://ak57.in/?p=8586 The markets were on a roll last week and the BSESENSEX hit a new lifetime high. NIFTY had done so just after the election results were declared in March 2017 for the five states. It has been making new highs ever since. Having crossed the 30k mark the markets would be relieved that Mount Everest has been crossed. Having done so there was a mild correction over the remaining two days of the week. The BSESENSEX gained 553.10 points or 1.88% to close the week at 29,918.40 points. NIFTY gained 184.65 points or 2.02% to close at 9,304.05 points.

In primary market news the issue of S Chand and Company Limited was very well received and was oversubscribed 59.49 times. The QIB portion was subscribed 44.27 times, HNI 204.65 times and Retail 6.07 times. In terms of lot wise or number of applications, the retail portion saw just over 9 lac applciations being received which translated to 5.18 times subscription. The cost of leverage for the HNI varies from Rs 131 to 157 depending upon the interest rate payable by him. This amount is based on % to 6% interest rate.

India’s first Investment Trust instrument issue opens on Wednesday the 3rd of May and closes on Friday the 5th of May. IRB Invit would be issuing through a fresh issue and an offer for sale of units worth about Rs 4,500 crs. There is a green shoe option as well which allows 25% of the over subscription to be retained. The issue bad price is Rs 100-102 and the minimum lot size is 10,000 units. Applications should be for one lot of 10,000 units and then in multiples of 5,000 units thereafter.

This instrument offers investors returns in dual form where in the initial part of the instrument there is an interest income component and also dividend income component. The interest would typically be 60% and dividend 40% which over time would change to 40% interest and 60% dividend. The expected returns for domestic institutions who get benefit on interest income is expected to be 12.4% while for individuals it would be 10%.

The company would be transferring/selling some of its operational and having residual average life of 16 years to the trust. The current toll income of these projects is roughly Rs 1,000 crs. The trust would pay out to its unit holders at least twice per year as mandated by SEBI. IRB plans to do it four times as it pays currently to its equity shareholders. The instrument is unique and would open up long term funding for long gestation infrastructure projects in road development, transmission lines, real estate and ports.

Markets are strong and they have momentum with them. Going forward there any at best be correction which would help in forming a base at higher levels. This would continue as long as there is liquidity which currently defies logic. Markets are expensive but one cannot stop them in the face of liquidity. Enjoy the rally.

]]>