Shares of Rail Vikas Nigam Limited or RVNL listed on the bourses yesterday. The company had tapped the capital markets through an offer for sale of 25,34,57,280 equity shares in a price band of Rs 17-19. There was a discount of Rs 0.50 for retail investors and eligible employees. The issue was open from Friday the 29th of March and closed on Wednesday the 3rd of April.

The issue was subscribed 1.83 times overall. The QIB portion was subscribed 1.36 times. HNI portion undersubscribed at 0.80 times, Retail portion subscribed 2.12 times and Employee portion subscribed 2.12 times. There were 2,19,380 application forms and on the basis of forms the retail portion was subscribed 1.93 rimes.

The discovered price on both the exchanges was Rs 19.00. The high was Rs 19.05 on the BSE while the low was Rs 18.60. On the NSE the high was Rs 19.80 while the low was Rs 18.65. The close on both the exchanges was Rs 19.05, a gain of Rs 0.05 or 0.26%.

The traded volume on the two exchanges combined was 10.02 cr shares which was 38.95% of the IPO size of 25.34 cr shares. Delivery volume was 3.90 cr shares which was 38.96% of traded volume and 15.42% of the issue size. The traded volumes and delivery volumes were healthy. The only thing negative was that the traded range was quite poor, a mere Rs 1.15 and yet we saw such huge volumes.

This could probably because the share price point at Rs 19 makes it a tempting price to trade. Well first day, nothing significant has happened and a little over a sixth of the issue sized has changed hands. We need to track this counter for a week before forming any views.

Polycab India Limited which had tapped the capital markets with its offer for sale of 1,75,82,000 equity shares and a fresh issue of Rs 400 crs in a price band of Rs 533-538 received overwhelming support. The issue was subscribed over 52 times.

The company had earlier allotted 74,54,119 equity shares at Rs 538 to 20 Anchor investors comprising of 25 entities.

The QIB portion was subscribed 93.09 times, HNI portion was subscribed 110.74 times, Retail portion was subscribed 4.66 times and Employee quota was subscribed 3.20 times. The overall issue was subscribed 52.16 times. There were 12,24,608 application forms making the retail portion subscribed 3.8 times on basis of forms.

The cost of interest has varied from 7% to 8% for this issue. Taking an average of 7.5% for 7 days, the same works out to Rs 85-86 Rs per share. This effectively means that the share must list and trade at a price of Rs 624 and higher for a breakeven to be achieved by the leveraged HNI.

Full details of the subscription are given below: –

Markets gained on three of the five trading sessions during the previous week. The benchmark indices made new life-time highs as well and are on course for making more this week. The BSESENSEX gained 189.32 points or 0.49T to close at 38,862.23 points. NIFTY gained 42.05 points or 0.36% to close at 11,665.95 points. The broader indices saw BSE100, BSE200 and BSE500 gain 0.31%, 0.31% and 0.28% respectively. BSEMIDCAP was up 0.19% while BSESMALLCAP was up 0.12%.

The BSESENSEX life-time high was 38,989.65 points which was breached first on Monday and then on Tuesday and also on Wednesday to now become 39,270.14 points. NIFTY life time high was 11,760.20 points which was crossed on Wednesday by a whisker to touch 11,761.00 points. Both the indices are on course to make new highs in the coming week.

RBI in its first monetary policy review for 2019-2020, cut repo rate by 0.25% to 6.00% on expected lines. It also cut reverse repo rates by 25 basis points to stand at 5.75%. Markets after initially rallying slipped and lost ground on the day that the rate cut happened.

The week saw the issue from Metropolis Healthcare Limited get subscribed 5.84 times. The issue received a late surge in the last 30 mins from QIB’s which saw their bucket being subscribed 8.88 times. HNI portion was subscribed 3.03 times while Retail was subscribed 2.21 times. Employees was under subscribed at 0.05 times.

The offer for sale and fresh issue from Polycab India Limited opened on Friday and closes on Tuesday. The price band is Rs 533-538 and is likely to see huge subscription as the HNI portion would be funded by NBFC’s. The company had an EPS of Rs 26.23 for the 12 months ended March 2018. If one were to look at the 9 months numbers for 2018-2019, the EPS has jumped from Rs 12.79 to Rs 25.31 a year ago. The fourth quarter is the best quarter for this industry and it would be fair that the company is likely to report an EPS closer to Rs 36-39 in the year ended March 2019. The difference in EPS for the 12 months and none months of FY 2018 is Rs 13.44. Even considering that the company earns this or slightly lower the estimated EPS for FY 19 is on track. If one were to look at revenues, they have grown from Rs 4,878 crs in 9 months to Rs 5,561 crs in the current nine months. A year ago, the company had revenues of Rs 6,986 crs. The issue looks attractive and would receive excellent response. The issue consists of an offer for sale of 1.75 cr shares and a fresh issue to raise Rs 400 crs.

The first phase of polling would be held this week on Thursday the 11th of April. The nation would now get into election mode and the markets would be waiting to see the BJP manifesto and how they counter the minimum Rs 72,000 a year that the Congress plans to give the bottom 20% of India’s population.

Infosys and TCS in a first of its kind would both be declaring results for the January-March quarter and year ended March 2019 on the same day, Friday. The results of both would be compared and would give an excellent idea about the trends of the IT industry.

FPI’s or FII’s have been net buyers on almost all trading days. With expectation of better results from corporate India and a stable government when results are declared on 23rd May, markets will continue to be on a roll. The strategy should be to use the increased volatility to one’s advantage by buying into dips and selling on strong rallies. Do not short the market, sell only existing longs.