The world will be celebrating Christmas and New Year in a little over two weeks from now and more importantly the institutional fund managers typically begin their break a little earlier. With institutional player’s activity likely to be reducing in the coming days, local players or operators are gearing up to move the midcap and smallcap space. An initial trailer of this was visible last week where the benchmark indices the SENSEX and NIFTTY lost but the MIDCAP and SMALLCAP indices registered big gains. Further the BSEMIDCAP is at a new lifetime high while the SMALLCAP is at a 52 week high.
SAIL did its OFS successfully on Friday and the government raised Rs 1,715 from the divestment. The issue was oversubscribed 1.8 times in the non-retail category and 2.6 times in the retail category which got a 5% discount to the bid price. SEBI has permitted OFS to come with a cut off price for retail category so that retail investors need not get into the bidding issue and fine tune their bid. Unfortunately that did not happen here and hence the oversubscription was not as much as expected. The share price of SAIL has corrected significantly during the week on account of the OFS and lost Rs 6.50 pr 7.28% to close at Rs 82.80 which is below the floor price of Rs 83 for the OFS. One hopes that in future issues particularly the larger ones like Coal India which is expected next will have this facility.
Mangalore Chemicals is back in the news with SarojPoddar led Zuari group making a voluntary offer for 25.90% of Mangalore Chemicals at Rs 91.92. Readers would recall that the earlier offer from Zuari did not garner adequate response and whatever response was there had gone to Deepak Fertilisers whose bid price was substantially higher. The new offer is without Vijay Mallya as person acting in concert and this is probably due to the fact that the “Wilful defaulter” tag issue is there with him.
Whether this offer will succeed where the price is still lower than what Deepak had offered in its final price the first time around of Rs 93.60 plus an interest component. Interesting days ahead for the shareholders of Mangalore Chemicals which gained Rs 9.25 or 11.34% for the week to close atRs 90.85.
The IPO from Monte Carlo was oversubscribed with HNI’s preferring to avoid the issue. Details of the same are available on the article separately. The market will be choppy and action will continue to shift to midcap and smallcap which is more difficult to predict than the benchmark stocks or indices. Trade with caution so as not to dampen the festive spirit ahead.