C.E. Info Systems Limited who had tapped the capital markets with its offer for sale of 1,00, 63,945 shares in a price band of Rs 1,000-1,033, was subscribed 154.71 times. The issue has opened on Thursday the 9th of December and closed on Monday the 13th of December. Earlier the company had completed allocation to anchor investors by allotting 30,19,183 equity shares at Rs 1,033 which is the top end of the price band to 22 anchor investors comprising of 34 entities.

The discovered price was Rs 1,581 on BSE at which price 62,288 shares were traded. It was Rs 1,565 on NSE at which price 11,25,659 shares were traded.

The highest allocation was made to Fidelity who were allotted 4,64,688 shares or 15.40% of the anchor book. This was followed by Nomura who was allotted 5.77% or 1,74,258 shares. This was followed by an equal allotment of 1,54,896 shares or 5.13% to four anchor investors. The top six anchors were allotted 12,58,530 shares or 41.69% of the anchor book. In terms of domestic mutual fund participation, 10,06,395 shares or 33.33% of the anchor book was allotted to 9 anchors comprising of 17 schemes.

The issue saw the QIB portion being subscribed 196.36 times, HNI portion being subscribed 424.69 times and the Retail portion being subscribed 15.20 times. There were 31.54 lac applications and on the basis of lots the retail portion was subscribed 12.54 times. The cost of funding for the leveraged HNI was between Rs 715 to Rs 725 times. This means the issue must list at closer to Rs 1,800 g=for the leveraged HNI to make any money whatsoever.

The high of the day on BSE was Rs 1,586.85, the low was Rs 1,282.20 and the close was Rs 1394.55. The gain was Rs 361.55 or 35%. On NSE, the high of the day was Rs 1,590, low was Rs 1,282.60 and the close was Rs 1,393.65 a gain of Rs 360.55 or 34.91%.

The traded volume on the two exchanges combined was 145.38 lac shares which was 1.44 times the IPO size of 100.63 lac shares and 2.06 times the non-anchor portion of 70.44 lac shares. Delivery volume was 46.98 lac shares which was 32.32 % of the traded volume. It was 46.46 % of the issue size and 66.69 % of the non-anchor portion. The weighted average of the day’s trade was Rs 1,409.64 on BSE and Rs 1,412.20 on NSE.

In terms of institutional or bulk trade, two were reported on NSE. Fidelity bought 3,18,100 shares at an average price of Rs 1,404.47. The other trade saw Goldman Sachs buy 3,76,708 shares at Rs 1,392,99. The traded and delivery volumes were quite high.

The listing was good considering the share gained 35% at the end of day. The sad part was the oversubscription of the issue during subscription was so high that the cost of the leveraged HNI was in excess of Rs 670 which implied that the HNI needed the share to list and trade at Rs 1,700 which did not happen. While the share has done well, HNI’s have lost a bomb. Gong forward it would be interesting to see whether HNI’s can recover their cost in the next couple of days failing which they would have to book losses and exit.

Shriram Properties Limited who had tapped the capital markets with its fresh issue for Rs 250 crs and an offer for sale of Rs 350 crs, was subscribed 4.81 times. The issue has opened on Wednesday the 8th of December and closes on Friday the 10th of December. The price band is Rs 113-118. The discovered price on BSE was Rs 94 at which price 1,03,519 shares were traded. It was Rs 90 on NSE at which price 48,15,373 shares were traded.

Earlier the company had completed allocation to anchor investors. The company allotted 2,27,66,949 shares at Rs 118 which is the top end of the band to 10 anchor investors comprising of 30 entities. The highest allocation was made to Nomura who was allotted, 42,37,375 equity shares or 18.61% of the anchor book. This was followed by SBI Life Insurance who was allotted 37,29,000 shares or 16.38% of the anchor book. Nippon Mutual fund was allotted 33,89,875 equity shares or 14.89% of the anchor book. Sundaram Mutual Fund was allotted 11.14% of the anchor book.

Domestic mutual funds were allotted 84,74,625 equity shares or 37.22% of the anchor book. The top 4 anchors were allotted 61.02% of the anchor book.

The QIB portion was subscribed 1.93 times, HNI portion was subscribed 5.04 times, Retail portion was subscribed 13.27 times and Employee portion was subscribed 1.31 times. There were 4.56 lac applications and on basis of lots, Retail portion was subscribed 11.28 times.

The high of the day on BSE was Rs 106.35, the low was Rs 91.75 and the close was Rs 99.40. The loss was Rs 18.60 or 15.76%. On NSE, the high of the day was Rs 106.40, low was Rs 90 and the close was Rs 99.60 a loss of Rs 18.40 or 15.59%.

The traded volume on the two exchanges combined was 323.65 lac shares which was 0.64 times the IPO size of 508.73 lac shares and 1.15 times the non-anchor portion of 281.06 lac shares. Delivery volume was 112.42 lac shares which was 34.73 % of the traded volume. It was 22.10 % of the issue size and 40 % of the non-anchor portion. The weighted average of the day’s trade was Rs 100.35 on BSE and Rs 98.90 on NSE.

In terms of institutional or bulk trade, one was reported on NSE. Nomura bought 20 lac shares at an average price of Rs 95.53. The traded and delivery volumes were lower than expected. The share was under pressure as can be seen from the lower prices at which it traded. The share could be under further pressure going forward.

In conclusion, a poor listing and would reflect on the group as well.

Markets were under downward pressure in the week gone by and lost on four of the five trading sessions. BSESENSEX lost 1,774.93 points or 3.02% to close at 57,011.74 points while NIFTY lost 526.10 points or 3.00% to close at 16,985.20 points. The broader indices saw BSE100, BSE200 and BSE500 lose 3.21%, 3.22% and 3.18% respectively. BSEMIDCAP was down 4.53% while BSESMALLCAP lost 2.75%. In sectoral indices, just BSEIT and BSETECK saw upticks while everything else was down. The BFSI space was badly hit and many of the stocks in this sector suffered huge losses. The constitution of NIFTY is heavily skewed in favour of this sector and could weigh heavily in the coming week if markets and particularly the banking and NBFC space is under pressure.

Dow Jones lost 605.55 points or 1.68% to close at 35,365.44 points. The Indian Rupee was under pressure and lost 32 paisa or 0.42% to close at Rs 76.08 to the US Dollar.

The primary markets saw three listings during the previous week. The first of the block was Tega Industries which saw its share close on day one at Rs 725.50, a gain of Rs 272.50 or 60.15%. By the end of the week, the gains were reduced and the share closed with gains of 35.62%. The second share to list was Anand Rathi Wealth Limited which had issued shares at Rs 550. Shares closed on day one at Rs 583.50, a gain of Rs 33.50 or 6.09%. By the end of the week, these had reduced significantly to close at Rs 567.65, a gain of 3.21%. The third share to list was Rategain Travel Technologies Limited which had issued shares at Rs 425. The share had a very poor listing and saw its shares close day one at Rs 340.50, a los of Rs 84.50 or 19.88% down. This is indeed a poor listing and probably one of the few listings which has seen such a sharp fall on day one.

There is one IPO from CMS Info Systems Limited which opens in the coming week. The size of the issue which is entirely and offer for sale is Rs 1,100 crs. The price band is Rs 205-216. The issue opens on Tuesday the 21st of December and closes on Thursday the 23rd of December. The company is into the business of cash management and roughly 2/3rd of its revenues come from cash management services. The company had reported a net profit of Rs 169 crs on revenues of Rs 1,306 crs for the year ended March 2021. The fully diluted EPS for the same period is Rs 11.09. The PE for the stock is 18.49-19.48 times. Valuations look decent and should offer appreciation for investors investing with a medium-term outlook.

Quite a few issues would be listing next week. Prominent among them would be the issues from Shriram Properties Limited, C.E. Infosystems Limited, Metro Brands Limited and Medplus Health Services Limited.

Markets have been at the receiving end on three broad reasons. The first one is on continued selling by FII’s and they seem to be doing so now for over two months. The second is the fact that the US FED has announced the taper and the rate hikes that would happen in calendar year 2022. Global markets are worried about the same and this was reflected the way the Dow Jones reacted last week. Thirdly the scare about the new variant ‘Omicron’ seems to be unnerving various investors globally. Its not the number of deaths that have happened but the way the number of cases is rising rapidly across many countries. It becomes that much more important for citizens to observe social distancing and get themselves vaccinated.

Markets for the week ahead are very critically poised. The degree of comfort on NIFTY is just about 200 points away. Considering the fact that we lost over 250 points on Friday, this means less than a day’s fall. While this may or may not happen in a day, the possibility exists. One should be prepared for it. In case the markets go below this level and fail to recover, the fall could get precipitated in the coming days. One therefore has to be prepared to refrain from going long in the markets at current levels and play the market as it happens on a daily basis. In case we do not fall and markets recover, the rally should be used to book profits and wait for the fall which would come. Currently a sharp turnaround looks unlikely.

In conclusion, use market rallies to sell and wait for markets to decide their downward direction if any. The level required for a fall is a mere 200 points and may happen faster than one imagines. Therefore, play cautiously and avoid the temptation of attractive prices and bottom fishing.