Markets were fairly circumspect last week and the talking point remained action and drama at Infosys. BSESENSEX gained 71.58 points or 0.23% to close at 31,596.06 points while NIFTY gained 19.65 points or 0.20% to close at 9,857.05 points. The rest of the market was also fairly close and unlike previous weeks very clearly there was substantially less volatile this time around.
The Chairman, Vice Chairman and two other directors have stepped down from the board of Infosys and inducted Nandan Nilenkani as the Chairman of the board. While the issue which was getting dirty has been resolved partially, issues remain. It all began with the Panaya deal and with SEBI having ordered a probe in the matter the findings would have to be made public. If the beginning of the feud of NRN with Vishal Sikka is this deal the making of the report public is likely to raise a fresh issue. Anyway well for the immediate period things will quieten down and Nandan would have his act cut out in running the company. He was CEO almost eight years ago and that sure was a long time back in the fast changing IT world.
The buyback announced by the management at Rs 1,150 stands. As of 30th June just over 7 lac shareholders held 14.54 cr shares in the retail category. The total buyback of Rs 13,000 crs effectively means that 1.69 cr share in the retail category would be accepted. The retail category means that an individual on the record date of the offer (30th August) holds shares whose market value does not exceed Rs 2 lacs. At the current market price of Rs 913 this would mean 219 shares. In the retail category if everybody tenders shares then the acceptance ratio would be about 11%. If half the people tender shares it could be 22%. One must remember that the difference between the buyback price and the market price is significant and is currently higher by more than 26% making it very attractive. Also the retail portion may have seen addition of folios as the share got hammered and made a 52 week low of Rs 862 just last week.
There was an IPO which opened and closed last week Apex Frozen Foods Limited. The issue did quite well getting subscribed an overall 6.14 times. The QIB portion was subscribed 1.91 times, HNI 7.82 times, Retail 8.53 and Employee 1.10 times. Retail applications in numbers were 2.14 lakh subscribing the same in terms of lots 5.92 times. The issue raised Rs 152 crs in a price band of Rs 171-175.
The week ahead sees August futures expiring on Thursday the 31st of August. The previous series of July was a great one for the bulls when the series gained 516.45 points or 5.43% to end at 10,020.55 points. The current series sees the bulls under pressure and is down 163.50 points or 1.63% down. There are four trading sessions to go and a lot could happen but as of now it appears that bulls are under pressure this series.
It would be a tough week and markets would try to regain the momentum they have lost. With expiry a mere four days away it looks unlikely. Wait for opportunities to buy.
