Markets continued to rally and did so for the third consecutive week. They are on an uptrend since the last week of March which was a short three-day week. The BSESENSEX gained 565.68 points or 1.65% to close at 34,192.65 points while NIFTY gained 149 points or 1.42% to close at 10,480.60 points. The broader markets gained with BSE100, BSE200 and BSE500 up 1.21%, 1.17% and 1.08% respectively. Dow Jones gained 427.39 points or 1.75% to close at 24,360.14 points.

In primary market news, shares of Lemon Tree Hotels listed on Monday the 9th of April and had a great debut gaining over 27%. The shares were issued at Rs 56 and had received institutional support but were undersubscribed both in HNI and Retail categories. The share closed at Rs 71.60, a gain of Rs 15.60 or 27.86%. The share lost some ground during the week and closed at Rs 67.65 up 20.80%.

There was no other primary market news other than Lemon Tree. It appears the market conditions seem to have unnerved merchant bankers and promoters alike. The performance of some of the companies which came to the markets in the last fortnight of March leave a lot to be desired.

IT major Infosys has declared results for the quarter and year ended March 2018. Its net profit for the year was at Rs 16,029 crs against Rs 14,353 crs in the previous year. This includes a write back of Rs 1,432 crs on account of a tax provision made in the US on which they received an advance ruling. The EPS for the year was Rs 71 against Rs 62.77 in the previous year. The write back resulted in an EPS accretion of Rs 5.88 for the year. The company had also done a buyback during the year which resulted in reduction of equity and hence higher earnings. The company has guided for revenue growth of 6 to 8% for next year. What is important to note is that they have decided to sell Kallidus, Skava and Panaya. Panaya was the controversial acquisition during Vishal Sikka’s regime. Infosys results are average and one needs to see higher growth in the coming years if the company has to regain its lost aura. While Infosys is getting back on track everything seems to be in the price.

Recently listed ICICI Securities Limited posted impressive results. The EPS of the company has improved from Rs 10.48 to Rs 17.18. This of course does not tell the whole story as the company had reported an EPS of Rs 12.46 for the nine months period ended December 2017. The shares which were issued at Rs 520 and fell to a low of Rs 400 have rebounded to close at Rs 422.65. There could be some more improvement in prices in the coming days. This improvement would be more to do with the share valuation becoming cheaper than the valuation at issue price.

The husband and brother in law of Chanda Kochhar, the CEO of ICICI Bank are under questioning and it appears that various departments are putting pieces of the puzzle together. There has been impropriety no matter what the ICICI Bank board may have said. What would be really interesting is to see when these departments take action what face would the board have and where they would hide.

The other lady Shikha Sharma would be stepping down at the end of the year. There were unconfirmed reports that Axis Bank would be taken over by another private bank. While rumours will always remain as rumours till confirmed, shares of Axis Bank were big gainers up Rs 41.20 or 7.60% at Rs 541.90.

Markets seem to be in for the long haul and will have obstacles on the way. It all began with trade wars, then missiles into Syria and crude prices hanging overhead like Damocles sword. If any of these issues get over in India we have Karnataka elections initially and state elections in Rajasthan, Madhya Pradesh and Chhattisgarh. Not to forget all of this followed by general elections as scheduled in May 2019.

The trend currently is up and one should buy on dips. No doubt there would be obstacles and pain points along the path but use these pricks as opportunities to buy.

Shares of Lemon Tree Hotels Limited had amore than a dream debut and gained over 27%. The company had tapped the capital markets with its offer for sale of 18,54,79,400 shares in a price band of Rs 54-56. The company had allotted 5,56,43,820 equity shares to 18 anchor investors comprising of 20 entities. The highest allocation was made to SBI Mutual Fund of 1,15,84,740 equity shares which corresponds to 20.90% of the anchor allocation.

The public issue did not receive adequate response from HNI’s and Retail investors but was oversubscribed by QIB’s. The QIB portion was subscribed 3.89 times while HNI and Retail was a mere 12% each. The overall subscription was 1.89 times. Very clearly Retail and HNI comprising of half the issue were not enthused by the same.

The discovered price was Rs 61.60 on both the exchanges which was a good 10% higher. The low of the day was Rs 57.30 on the BSE and Rs 57.25 on the NSE. The high was the upper circuit of Rs 73.90 on both the exchanges. The close was Rs 71.60, a gain of Rs 15.60 or 27.86% on the BSE. On the NSE the close was Rs 71.65, a gain of Rs 15.65 or 27.95%.

The traded volume was 764.20 lakh shares which was 41.20% of the IPO size of 1854.79 lakh shares. The delivery volume was 146.70 lakh shares which was 19.20% of the traded volume and 7.91% of the IPO size. The delivery as a percentage of non-anchor portion was 11.30%. One would have thought with lack of participation from HNI and Retail, the traded volume would not be so high. The weighted average of the day was Rs 66.59 on the BSE and Rs 65.58 on the NSE.
There were two institutional trades reported on the day. The first was a buy of 51.54 lakh shares by Mirae Asset at Rs 65.61. the second was a sell trade by DB International which sold 44.62 lakh shares at Rs 62.07.

While there was a lot of short covering during the day which helped the share gain ground, it still remains an expensive share and the massive rally makes it that much more expensive. While listing day has been a success for the company its performance going forward would be watched carefully.