It was an extremely volatile week with the markets unable to make up its mind which way they wanted to trend. In a short four-day week, the markets gained on two and lost on two days. They however threatened to run away on the upside each day but profit taking brought markets down. In the end they were as flat as flat could be. The BSESENSEX gained 5 points or 0.01% to close at 34,010.76 points while NIFTY lost 2.65 points or 0.03% to close at 10,452.30 points.

The weakness in our markets is apparent as in the same time Dow gained 1,028.48 points or 4.08% to close at 25,219.38 points. FII selling is keeping the markets under pressure.

A major scam has hit the country in the form of ‘LOU’. The second largest PSU bank, Punjab National Bank is in the thick of a Rs 11,300 cr hit. There would be repercussions on many other banks where money was effectively taken without collaterals or adequate assets. The people involved are diamantaire Nirav Modi and his family and his maternal uncle Mehul Choksi who owns Gitanjali Gems and the group companies. While every person who commits a scam conveniently leaves the country, these people too have done the same. PNB during the four days has lost Rs 31.15 or 24.79% to close at Rs 125.65. Gitanjali Gems has lost significantly more and is down Rs 21.15 or 56.32% at Rs 37.55. Without casting aspersions on any one, it is becoming clear that the scams are getting larger and larger and is causing concern in the difference between the industrialists and the farmers.

The banking scam has its roots in the way bank Chairman’s and Executive Directors were previously appointed. There is no definite evidence available for the same but everybody knew that you had to grease your way through for such appointments. It was akin to the police department where plum postings would only be available on paying for them on the basis of capacity to earn.

The fall out of this scam would hit the gems and jewellery business and have serious ramifications for the industry. As it is amongst the list 0f top defaulters we have quite a few names from this industry. The lure of quick money and the shine from gold does make many lose their self-respect and their prestige quicker than expected.

In primary market news the issue from Aster DM Healthcare was subscribed 1.31 times. QIB portion was subscribed 1.31 times while HNI was undersubscribed at 0.55 times. Retail portion was subscribed 1.18 times. Yet another example where HNI’s have not subscribed because there was no active grey market in the share and hence there was no way that the same could get subscribed 100 times or more by HNI’s. The 100 times level is a benchmark for getting leveraged funds at a margin of about 1%. Its time SEBI stopped allowing HNI’s to bid for shares that they can never be allotted.

Volatility would continue to dominate proceedings on D-Street. The mood has turned sombre and the market technical distinctly weak. Trade cautiously.

The primary issue from Aster DM Healthcare Limited was subscribed. The company had tapped the capital markets with its simultaneous offer for a fresh issue to raise Rs 725 crs and an offer for sale of 1,34,28,251 equity shares in a price band of Rs 180-190. The issue was open from Monday the 12th of February and had closed on Thursday the 15th of February.

Earlier the company had allotted 1,54,75,843 shares to 7 anchor investors comprising of 8 entities. The highest allocation was done to SBI Mutual Fund and Sundaram Mutual Fund of 34,25,058 shares a piece which is 22.13% of the anchor book.

The issue was subscribed 1.31 times. The QIB portion was subscribed 2.1 times. The leveraged HNI portion was undersubscribed at 0.55 times. This is yet another issue where the HNI has not applied for simply because there was no grey market activity. Secondly unless the issue in the HNI category is likely to get subscribed about 100 times, they do not subscribe to the same as the margin payable exceeds 1% and could be as high as 5-10%. The so-called risk is reduced significantly by selling shares in the grey market and ensuring that they are adequately covered. The retail portion was subscribed 1.18 times.

The full details of the subscription are given below: –