Markets saw a sharp plunge when trading began for the week on Monday on account of the new covid-19 virus strain found in UK. BSESENSEX and NIFTY lost about 4.5% on an intraday basis but recovered a fourth on that day itself. The story of the week is the fact that all losses of Monday were just about recovered in the next three days. This shows the market resilience and the bulls resolve to just not let go. They have the market in full control.

BSESENSEX gained 12.85 points or 0.03% to close at 46,973.54 points while NIFTY lost 11.30 points or 0.08% to close at 13,749.25 points. The low of the day on Monday was 44,923.08 points while it was 13,131.45 points for NIFTY. The broader markets saw BSE100, BSE200 and BSE500 lose 0.12%, 0.14% and 0.20% respectively. BSEMIDCAP was down 0.70% while BSESMALLCAP lost 0.53%.

The Indian Rupee gained 2 paisa or 0.03% to close at Rs 73.54 to the US Dollar. Dow Jones gained 20.82 points or 0.07% to close at 30,199.87 points. The high for the year remains at 30,344 points and on a year-to-date basis, Dow is up 5.82%.

Indian markets have fared quite well during the calendar year 2020. BSESENSEX gained 5,719.80 points or 13.86% compared to the year end 2019 figure while NIFTY gained 1,580.80 points or 12.99%. BSEMIDCAP is up 2,708.87 points or 18.10 % while BSESMALLCAP is up 3,976.16 points or 29.02%. Clearly the small and midcap sectors have outperformed the benchmark indices. If one were to take the gains from the year lows made in March 2020, the gains in BSESENSEX and NIFTY are in excess of 80% while in the case of small and midcap they would be closer to doubling.

The week saw the primary market issue of Antony Waste Handling Cell Limited opening and closing for subscription. The issue was in a price band of Rs 313-315 and consisted of a fresh issue of Rs 85 crs and an offer for sale of 68,24,933 equity shares. The issue was subscribed 15.04 times with the QIB portion subscribed 9.67 times, HNI portion 18.69 times and Retail portion 16.55 times. There was a total of 9.55 lac application forms.

Shares of Mrs Bectors Food Specialities Limited listed on Thursday the 24th of December and were a roaring success. The company had tapped the capital markets with a fresh issue of Rs 40.5 crs and an offer for sale of Rs 500 crs at a price of Rs 288. Shares listed at Rs 500 and closed at Rs 595.55, a gain of Rs 307.55 or 106.79%. Delivery percentage on non-anchor basis was 88.27%. There was hardly any institutional activity reported on the exchanges in the concerned scrip, indicating that the gains were more of being speculative in nature.

Anil Agarwal the promoter of Vedanta Limited bought 18.15 cr shares of the company through multiple block deals at an average price of Rs 160 on the exchanges on Friday. This is in sharp contrast to the man offering to buyback his shares at Rs 87.25 a few months back. When LIC had offered to sell shares in the buyback at Rs 320 a piece, many people had raised eyebrows. Further ISEC, the broking arm of ICICI had through a report informed investors that they had a sell rating on the stock and the target price of the same was around Rs 130. The Vedanta group is likely to be the successful bidder for the assets of Videocon and is also in the running for the acquisition of BPCL. So much for a group who says they did not have money to buy back shares of Vedanta beyond Rs 125-130. Incidentally Vedanta shares gained Rs 15.30 or 10.38% to close at Rs 162.65.

The week ahead sees December futures expiring on the last trading day of the calendar year, 31st December. The current series has seen gains of 762.25 points or 5.87% so far. With four days to go and having seen the market resilience with the sharp fall last Monday, one should expect the bulls to press the pedal. Expect a flareup leading into Thursday which would also be the day when NAV of mutual funds are calculated.

On the covid-19 front, the world saw 8,11,42,113 patients, 17,71,884 deaths and 5,72,91,222 patients who have recovered. In India, we saw 1,02,08,725 patients, 1,47,940 deaths and 97,81,945 patients who have recovered. Compared to the previous week, the world saw 39,72,754 new patients, 72,324 deaths and 32,02,739 patients who recovered. In India we saw 1,52,477 new patients, 2,097 deaths and 1,76,555 patients who recovered.

FII’s who normally take a break in the last fortnight of December have been active till the end of last week. They have bought on a net basis Rs 41,325 crs in December so far while Domestic institutions have sold Rs 33,051 crs in December. What will be the approach in the last four days is anybody’s guess but looking at the relentless way that they have been investing with over 22 billion US Dollars invested in 2020, I believe they won’t stop for the next four days.

The week ahead sees expiry in four days. Expect markets to be super volatile with an upward bias. The bulls would go all out to press home the advantage while bears will try to salvage some pride. Use rallies to book profits and as mentioned last week, try to improve the stocks fundamentally in the portfolio. Expect to end 2020 with flying colours.

Wishing all readers, a profitable and Happy New Year 2021

Mrs Bectors Food Specialities Limited which had tapped the markets with its simultaneous offer, had a spectacular debut at the bourses and gained 106.79%. The company had issued shares at Rs 288 and they closed at Rs 595.55 on BSE.

The issue consisted of a fresh issue of Rs 40.5 crs and an offer for sale of Rs 500 crs. The issue was open from Tuesday the 15th of December and closed on Thursday the 17th of December. The issue was very well received and was subscribed 199.41 times overall with QIB portion subscribed 178.08 times, HNI portion 625.20 times, Retail portion 29.53 times and Employee portion 45.80 times. There were 25.82 lac applications in the issue.

Earlier the company had allotted 56,25,415 equity shares to 15 Anchor investors consisting of 31 entities. An identical 4,75,500 equity shares or 8.5% were allotted to 7 entities which included names like Franklin India, SBI Mutual Fund, Nomura, Goldman Sachs and Nippon India.

The discovered price on BSE was Rs 500 while it was Rs 501 on NSE. The traded volume at the discovered price was 1,53,304 shares at BSE and 28,18,219 shares on NSE. The high of the day was Rs 601.20 and low was Rs 500 on BSE. The weighted average of the day was Rs 577.81. The close was Rs 595.55, a gain of Rs 307.55 or 106.79%.

On NSE, the high of the day was Rs 600 and the low was Rs 500. The close was Rs 594.20, a gain of Rs 306.20 or 106.32%. The traded volume of the two exchanges combined was 408.48 lacs which was 2.18 times the IPO size and 3.11 times the non-anchor portion of 131.41 lac shares. Shares marked for delivery were at 115.99 lac shares which was 28.40% of the traded quantity. It was 61.81% of the IPO size and 88.28% of the non-anchor portion. There was just one name on the institutional side which was reported. Algorismus Advisors LLP bought 2.5 lac shares at the discovered price on a net basis.

The cost of funding for the leveraged HNI was in the region of Rs 212-217. Gains at the closing price were in excess of Rs 300. Even if one were to consider the weighted average, the gains were in the region of Rs 285-290. Clearly this would be yet another issue which has delivered stellar returns on day one for investors.

Going forward, the moot question would be on valuations. The company is now not only expensive but commands valuations which cannot be justified when compared to its peers. Further there would be issues with growth in this company and hence profits. One would have to watch the performance of this company to see what further steam if any, this company has.