PowerGrid Infrastructure Investment Trust or PGInvit which had tapped the capital markets with its fresh issue and offer for sale of Rs 7,735 crs listed on the bourses. The fresh issue was for Rs 4993.48 crs while the offer for sale was for Rs 2741.51 crs. The issue was open from Thursday the 29th of April and closed on Monday the 3rd of May. The price band was Rs 99-100. The company allotted 34,80,74,100 units to 33 investors comprising of 47 entities. The top allocation was done to CPP Investment Board of 8 cr units or 22.98% of the anchor size. Three investors were allocated an identical 4 cr units or 11.49% of the allocation. They included Capital Income Builder and two Indian mutual funds, SBI and HDFC. This means that the top four investors were allocated 57.45% of the anchor allocation.

There were just two buckets. In the QIB category the issue was subscribed 4.63 times while the Non-institution category it was subscribed 5.07 times. The overall issue was subscribed 4.83 times. There were over 46,200 forms. The average application size was about 21.20 lacs. The issue including anchor portion received bids for over 24,000 crs against the issue size of 7,735 crs.

The discovered price was Rs 104 on both the exchanges. At the discovered price, the traded volume was 2.69 lac units at BSE and 92.18 lac units at NSE. The high of the day was Rs 104.97, low was Rs 102.84 and close Rs 102.98 on BSE. The gain was Rs 2.98 or 2.98%. On NSE, the high of the day was Rs 104.90, low was Rs 102.75 and close was Rs 103.05. The gain was Rs 3.05 or 3.05%.

The traded volume was 468.62 lac units on the two exchanges combined. This was 6% of the IPO size of 7734.99 lac units and 11% of the non-anchor portion of 4254.25 lac units. Delivery volume was 417.54 lac shares which was 89.10% of the traded volume. It was 5.40% of the IPO size and 9.81% of the non-anchor portion. Weighted average of the days trade was Rs 103.55 on BSE and Rs 103.69 on NSE. On expected lines, there were no names in the institutional trade’s category on BSE or NSE.

There was an event which had me taken by surprise. The application lot size was 1,100 units or Rs 1.10 lac at the top end of the band while the trading lot was 100 units or effectively Rs 10,000 on listing day. While SEBI has been maintaining that INVIT is not a product for retail investors, it seems quite strange and contradictory that retail investors do not understand the product and hence the ticket size for application is Rs 1.1 lac. However, when it comes to trading, retail investors understand the product and hence trading lot size is Rs 10,000. In the case of the SME exchange, the lot size which is greater than 1 lac remains the same until the share migrates to the main board. Here in the case of INVIT, the change happens on listing. One would like to understand the rationale behind the move and appreciate why such a thing has been done. One wonders whether the idea is to debar retail investors the benefit of getting allotment at par or something more than that. Hope the regulator throws some light on this issue on some day.

The issue has done well for itself on day one. With the first pay-out due only post the September quarterly results, the next event of importance would be RBI MPC (Monetary policy committee) meeting and whether there are any changes to the interest rates.

Expect the rates of this instrument to drift from hereon.

The week began with losses and recovered as the same progressed. By the close of the week, BSESENSEX had gained 424.11 points or 0.87% to close at 49,206.47 points while NIFTY gained 192.05 points or 1.31% to close at 14,823.15 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.38%, 1.54% and 1.58% respectively. BSEMIDCAP was up 1.46% while BSESMALLCAP was up 2.53%. The top sectoral gainer was BSEMETAL up 10.29%. In the previous week it had gained quite similarly at 10.3%. In individual stocks one saw Tata Steel gain 14.31%, Hindalco gain 10.13% and Vedanta gain 10.04%. Steel Authority of India Limited gained 20.76%.

The Indian Rupee gained 55 paisa or 0.74% to close at Rs 73.51 to the US Dollar. Dow Jones hit yet another lifetime high of 34,811 points and closed marginally lower. Dow Jones gained 902.91 points or 2.67% to close at 34,777.76 points.

Metal stocks have been on a roll and have done exceedingly well. Stocks like Tata Steel and Hindustan Aluminium are not only trading at 52-week highs but lifetime highs. Not sure whether its time to turn cautious or not yet, but certainly to expect some substantial correction since prices have risen by more than 3.5 times in the case of Hindalco and almost 4 times in the case of Tata Steel in the last 12 months.

Yet another interesting case is that of Vedanta Limited which wanted to delist and had offered a floor price of Rs 87.25. The largest insurance company had in the delisting offer proposed to tender its shares at Rs 320. Many wondered who was right at that point of time. The fact of the matter is that LIC as one institution saved the wealth of millions of small shareholders and stonewalled the delisting. In less than 12 months the share has rallied more than 4.5 times to close at Rs 283.20 on Friday. Kudos to LIC for taking their stand which has almost been completely vindicated in about six months. As a piece of news, the share saw selling on two different occasions as the weightage of the stock was readjusted for changes in free float as the promoter holding has increased to 65.2% post the voluntary buyback of shares at Rs 237 in April 2021.

Results from Bandhan Bank were disappointing on two fronts. Firstly, their housing loan book saw huge provisions and their micro-finance book continues to be under pressure. The bank saw its profits for the final quarter drop a massive 80% at Rs 103 crs against Rs 517 crs in the similar quarter a year ago. The bank has almost doubled its provisions to Rs 1,594 crs against 827 crs in the year ago period. This result should be an eye opener to many more in a similar line of activity going forward. With the sharp increase in covid-19 cases, there is a need to preserve cash amongst the lower levels of the social pyramid and this is even at the cost of lowering of CIBIL scores. Borrowers believe that the pandemic could hit just about everyone and the need would be cash. This is likely to have an impact more on the results which come for Quarter one of FY22 and onwards. This space needs to be watched in the markets carefully.

The covid-19 front saw the world register 15,89,68,165 patients, 33,06,675 deaths and 13,65,10,827 patients recover. In India we saw 2,26,62,410 patients, 2,46,146 deaths and 1,86,65,266 patients recovering. Compared to the previous week, the world saw 54,76,804 new patients, 90,322 deaths and 57,09,932 patients recovering. In India, we saw 27,42,695 new patients, 27,201 deaths and 23,83,528 patients recovering. Medical aid in the form of oxygen, medicines and vaccines are coming in to India based on the fact that this country had helped many countries during the first year of the pandemic when cases in India were much lower. One hopes and prays that things come under control at the earliest and with the least loss to human life.

The week ahead has a trading holiday on Thursday the 13th of May. Markets in India have been choppy and volatile and trading in a broad zone for quite some time. While they did try to break downwards when they briefly traded around 47,250 levels on the BSESENSEX around the 3rd week of April, they have bounced back smartly from there. The immediate resistance is the previous high made around 50,375 points a week later at the end of April. These levels look as important levels and either of them have to be breached and sustained for any meaningful move thereafter. Similar levels on NIFTY are 14,150 and 15,050 points. The strategy for the four-day week should be to continue to trade and sell on sharp rallies and buy on sharp dips. The importance of sharpness should not be ignored. Midcap and Smallcap stocks would continue to outperform the benchmark indices. Be cautious particularly in the metal pack. Trade cautiously.