Sterling and Wilson Solar Limited which had tapped the capital markets with its offer for sale for Rs 3,125 crs debuted on the bourses yesterday and lost about 7% at close. The company had issued shares at the top end of the price band of Rs 775-780. It had earlier completed allocation to anchor investors where it allotted 1,80,28,846 equity shares to 21 anchor investors comprising of 27 entities.

The highest allocation was made to Nomura India Investment Fund Mother Fund who was allotted 28.84 lakh shares or 16% of the anchor book. This was followed by Reliance Capital Trustee Co Ltd who was allotted 25.64 lac shares or 14.22% in three funds. Indian funds were allotted 20.27% of the anchor book while Foreign funds were allotted 79.73% of the anchor book.

The issue was open from Tuesday the 6th of August till Thursday the 8th of August. The issue was subscribed by QIB’s and received decent support from HNI’s and Retail investors. However, the HNI and Retail portion remained undersubscribed. HNI portion was subscribed 0.89 times while Retail portion was subscribed 0.30 times. The issue was overall subscribed 92.25% including anchor allocation and garnered Rs 2883 crs.

The discovered price on BSE was Rs 700 while it was Rs 706 on NSE. The traded volume at the discovered price was 11,380 shares on BSE and 1,25,810 shares on NSE. The high of the day was Rs 755.50 on BSE and 753.45 on NSE while the low was Rs 691 and 690.10. Call it strange or bizarre coincidence, the low yesterday made by debutant Spandana was Rs 690 and Rs 691.10. Unbelievable but true a difference of just 10 paisa. Of course, the issue price was different. The closing price of SW Solar was Rs 725.35 on BSE, a loss of Rs 54.65 or 7.01% while it was Rs 726.20, a loss of Rs 53.80 or 6.90% on NSE.

The traded volume was 49.08 lac shares which was 13.28% of the IPO size or 25.92% of the non-anchor issue. Delivery volume was 21.10 lac shares which was 42.99% of the traded volume and 5.71% of the IPO size of 369.61 lac shares. It was 11.15% of the non-anchor portion. Weighted average of the days trade was Rs 724.65 on BSE and Rs 724.16 on NSE which is very close to the days close as well. This indicates that the share was never under any severe pressure throughout the day. Prices were stable and even though the share closed with losses of 7% it was steady.

There were no institutional trades on either the buy or sell side.

The conclusion of the day was that shares closed with losses of 7% on decent trading and reasonable deliveries. The size of the issue was large and this needs to be borne in mind when looking at the overall trading and delivery percentage.

Spandana Sphoorty Financial Limited which had tapped the capital markets with its simultaneous offer of a fresh issue of Rs 400 crs and offer for sale of 93,56,725 equity shares debuted yesterday on the bourses and had a very volatile day. The issue which had a price band of Rs 853-856 and shares were allotted at Rs 856 saw a low of Rs 690 and a high of Rs 865 on the BSE before closing at Rs 848.40.

The company had earlier allotted 42,08,886 equity shares to 15 anchor investors comprising of 18 entities. The highest allocation was made to four investors of 4,43,938 equity shares representing 10.5% of the anchor allocation to Wells Fargo, Bajaj Allianz Life Insurance, Goldman Sachs and ICICI Prudential Insurance. The issue had opened on Monday the 5th of August and closed on Wednesday the 7th of August.

The issue was just about subscribed. The QIB portion was subscribed 3.11 times while the remaining two segments remained undersubscribed. HNI portion was subscribed 0.55 times while retail was subscribed just 0.09 times. One would have expected that with HNI and Retail hardly there and having a total allotment of just about 16.43 lac shares from an issue size of 140.29 lac shares, share would have less movement was grossly wrong. Volatility was at an extreme.

The discovered price on the BSE was Rs 824 while it was Rs 825 on NSE. The traded volume during price discovery was quite low with 2,854 shares traded on BSE and 1,45,884 on NSE. After price discovery the share tried to reach the issue price but failed to do so. The share price at 10.21 am was Rs 834-836 on both the exchanges and in a span of 10 minutes it fell to Rs 690 on BSE and Rs 691.10 on NSE. This is an amazing fall and defies logic. With HNI and Retail investors hardly there who did this price fall when markets were positive and the SENSEX was up about 300-350 points? I am sure the regulator should sense something and feel it is worth his while to look into the issue and explore the same.

Anyway, the stock then rallied over the next three hours or so and hit a new high of Rs 865 on BSE and Rs 866 on NSE. The closing price was Rs 848.40 on BSE, a loss of Rs 7.60 or 0.89% while it was Rs 847.80 on NSE, a loss of Rs 8.20 or 0.96%. The weighted average of the days trade was Rs 806.86 on BSE and Rs 804.79 on NSE. The traded volume on the two exchanges combined was 51.04 lac shares which was 36.38% of the IPO size of 140.29 lac shares. If one were to consider the non-anchor portion the traded volume was 51.97%. Delivery volume was 8.85 lac shares which was 17.34% of the traded volume. It was 6.31% of the IPO size and 9.01 % of the non-anchor portion. In either case traded volume and delivery volume were quite low but volatility was significantly higher.

There was little or hardly any interest from HNI’s in this issue. They have probably found a new way to make their killing by increased volatility. While fundamentals of the company, its business have all taken a back seat the volatility on debut day has ensured that this share would be remembered as the one which burned investors, many intra-day traders and left analysts confused about whodunit?

In conclusion for the record book, shares issued at Rs 856 after a volatile day ended at Rs 848.40.

The week gone by had a mere three trading days and was volatile even in that. The BSESENSEX closed with losses of 231.58 points or 0.62% at 37,350.33 points while NIFTY lost 61.85 points or 0.56% to close at 11,047.80 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.72%, 0.67% and 0.69% respectively. BSEMIDCAP was down 1.31% while BSESMALLCAP was down 0.90%.

A large part of the damage in the benchmark indices was contained by Reliance Industries which was also the top gainer. Reliance was up Rs 115 or 9.9% at Rs 1,277. This kind of a move has come after a long time. This gain was primarily on account of the company saying at its AGM held on Monday that it was in talks to sell a stake to Saudi Aramco for 15 billion dollars. Over the last month or so the total debt of Reliance had become a matter of concern and the company was downgraded on this count. This news caused the share to gain sharply and, in the process, helped the indices also stabilise.

Dow Jones was all over the place last week. The net result was a weekly loss of 401.43 points or 1.53% at 25,886.01 points. The daily movement was an eye opener and indicates the amount of nervousness. Monday saw a loss of 390points, Tuesday a gain of 382 points, Wednesday sharp fall of 800 points, Thursday and Friday saw gains of 100 and 307 points respectively. Total gains during the week were 789 points while losses were 1,190 points. Total movement during the week was 1,979 points. This is effectively a change of 395 points per day or 1.52% per day. Just to put in perspective while we had a short and volatile week, the total movement in three days on the BSESENSEX was 1,015 points (loss of 623 points and gain of 392 points) or 338 points daily average. This becomes a daily change of 0.90%.

The immediate cause of concern in US was yet another round of duty being imposed on Chinese imports into the US. This seems to have become never ending and is getting markets really worried. To add to this is tension in Hong Kong where civil strife is on and the city has been locked down. China has moved in military might to Shenzhen and there could be large scale violence in the immediate near term. There is a slowdown looming large and this is certainly not good news for the markets.

Back home, after having meetings with various stake holders, the FM had detailed meetings within the ministry and also the PMO. No public outcome is as yet available but is expected once the PM returns from Bhutan. Expect some announcement on this subject on Monday or Tuesday in the coming week.

The week ahead would see the listing of two IPO’s on Monday and Tuesday. Monday would see the issue from Spandana Sphoorty Financial Limited list. The issue was subscribed 1.05 times with the help of QIB portion which was subscribed 3.11 times. HNI and Retail was undersubscribed at 0.55 times and 0.09 times respectively. With little hangover of selling pressure the share should be able to sustain itself but one should not be surprised if the shares trades below its issue price. There was no funding of HNI applications and as a result there was hardly any grey market either.

Tuesday would see the shares of Sterling and Wilson Solar Limited list. The company had tapped the markets with its offer for sale of Rs 3,125 crs which saw the issue manage to be subscribed. The QIB portion ensured that the issue scraped through. HNI portion was subscribed 0.89 times and Retail portion 0.30 times. Looking at market conditions and the response, the share is likely to be under pressure unless some QIB’s decide otherwise. HNI interest seems to be generated from friends and well-wishers of the promoter families. For the Shapoorji Pallonji family this would be their maiden IPO and something to be cherished in their 150-year history.

In this issue as well, there was no funding and no grey market to talk about.

Markets are experiencing turbulence and tough conditions currently globally. The trade wars between China and US have been continuing for almost nine months, civil unrest recently added in Hong Kong, Iran and the middle East and Europe and Brexit. To add to this, we have a slowdown which seems to be gaining momentum. Oil prices which seem to have steadied are again under pressure. Oil price fall is of course good news for India.

Towards the end of June, in India it looked like this would be a monsoon starved year. By beginning of August, the scenario has changed completely and instead of a drought we have floods affecting about a third of the country. It appears the rain gods have rained with a vengeance this time. Effect of global warming and climate change and what it could do in future.

In such a scenario one has to depend on local cues and hope that issues on the domestic front are sorted soon. FPI issue of surcharge, some sort of one-time relief for auto sector and retail sector will go a long way. Expect good tidings on Monday or Tuesday. Trade cautiously and do not expect freebies but tweakings.