The week gone by had a little of everything for everybody. There was political news, corporate action, primary market news and what have you. The net result was that the markets saw the benchmark indices gain 2.2% while the broader indices like the BSE100, BSE200 and BSE500 gained between 2.5% and 2.6% while the BSEMIDCAP gained 3.19% and the real star BSESMALLCAP was up a staggering 6.28%.
RBI at its monetary policy review meet on expected lines kept rates unchanged. The Prime Minister launched the “MUDRA Bank” with a corpus of Rs 20,000 crs for the MSME segment. Further on his visit to France signed an agreement for the much delayed Rafale agreement with the French government for purchase of 36 aircraft to be delivered within two years and further aircraft to be negotiated under the ‘Make in India’ programme. These aircrafts and the negotiation would put India and the PM a few notches higher.
The primary market saw the listing of Adlabs Entertainment and Inox Wind Energy. Adlabs Entertainment is struggling to remain afloat above the issue price of Rs 180 and closed on Friday at Rs 177.65. The share had seen volatile movement on listing day where the discovered price was Rs 162 a discount of 10% to the issue price. Thereafter it made a low of Rs 156.40 and then a high of Rs 199 before closing at Rs 191.25. Since Monday when the share listed, its been slipping and closed the week at Rs177.65.
The other listing was Inox Wind Energy Limited. This was a rocking listing and probably it got the energy from wind with the share gaining over 34%. All investors have made money in the share and one hopes and prays that the success of this issue should not be taken as a benchmark for aggressive pricing looking at the returns.
There was an OFS from the government who sold 5% in REC with a floor price of Rs 315. The cut-off for the share for retail who were entitled to a 5% discount was Rs 333.30 indicating that if the sale of shares is widely known, retail will p[participate. NSE still has an irritant where they are insisting for 100% upfront cash or cash equivalent while BSE has in its circular mentioned 100% margin. The difference is in the response. Insiders say that NSE does not have adequate software to address this issue. If indeed this is the problem why it is not being addressed is by itself a mystery.
An IPO from VRL Logistics opens this week with the Anchor book on Monday and the issue open between Wednesday and Friday. The issue consists of a fresh issue of Rs 117 crs and an offer for sale of 1.71 cr shares in a price band of Rs 195-205. The issue would raise Rs 450-467 crs. The shares are being offered at a PE of 18.62-19.58 based on nine months ending December 2014 earnings on an annualised basis. The company had earned a net profit of Rs 71.69 crs in period ended December 2014 and Rs 57.17 crs for the year ended March 2014.
The company law board has announced the ratio for merger of NSEL with its parent Financial Technologies Limited as eight shares of NSEL for three shares of FT.
The week ahead has a trading holiday on Tuesday and would therefore see heightened activity on the remaining three days of the week. Results for the quarter ending March and year ending are yet to kick in full earnest and would happen next week onwards. The sharp movement in smallcap stocks and the sharp rise in Reliance shares should act as a sixth sense warning for street smart players.
See you next week/
