Shares of CL Educate Limited listed on Friday the 31st of March at the NSE where there was a listing ceremony. The ringing of the gong for the debut of shares to begin trading did not quite turn out to be what was expected. The price discovered was at Rs 398 and Rs 402 against the issue price of Rs 502. The discovered price was roughly 20% lower. The shares are traded on both the exchanges, BSE and NSE.

The company had earlier launched its simultaneous offer with the fresh issue component of 21.80 lakh shares and an offer for sale of 25.80 lakh shares. The price band was Rs 500-502. The company had allotted 14.28 lakh shares to nine anchor investors comprising of 17 entities. Four anchor investors each have been allotted 1,99,230 shares or 13.95% of the anchor portion.

The issue was subscribed but it may be said that the response was not very encouraging. The QIB portion was subscribed 3.65 times, HNI undersubscribed at a mere 0.21 times and retail at 1.63 times. There were a total of 73,000 applications which means that the issue on number of lots was subscribed 1.33 times. Considering that the retail size in recent issues has seen very encouraging response, this issue was not in the investor’s radar. The valuation, sector problems and recent issues in this sector doing badly were some of the reasons for the lacklustre performance. To top it all the company investing in building schools and a university added to their woes. While the company has done a deal to exit the schools and university, quite a bit of damage has already been done.

Coming back to the listing day, the issue traded at the upper band of the discovered price thereafter on very thin volumes. The total volume traded of the share which is in trade to trade mode for ten days was a mere 1.74 lac shares against the IPO size of 47.6 lakh shares, which means just 3.67%. This volume is probably one of the lowest in quite some time and shows the lack of interest even after the share was trading 16-17% lower.

From the table above one can see that the weighted average of the day was at Rs412.88 on the BSE and Rs 417.93 on the NSE. Post price discovery volume happened at the 5% upper circuit and the lower weighted average is on account of trade at the price discovery. Delivery was 100% as the share is traded in the trade to trade category.

All in all a very disappointing show. One needs to see whether support comes in at the lower levels in the coming days. Volume will be a key concern for the share.

Markets went into correction mode after touching new highs last week. They lost ground for the first three days of the week and then recovered some of the lost ground but remained negative for the week. The BSESENSEX lost 227.59 points or 0.77% to close at 29,421.40 points while NIFTY lost 52.05 points to close at 9,108 points.

There was plenty of news flow during the week. First of the block was the mega deal announced by Vodafone and Idea Cellular which would merge. The idea of this merger would be take on Reliance Jio which is disrupting the telecom space. Shares of Idea Cellular lost significant ground and were down Rs 17.05 or 15.8% post the announcement. Details of the price at which the shares would be swapped have not been announced. It needs to be kept in mind that while Idea is listed, Vodafone is not. With this deal happening probably the listing of Vodafone through an IPO may not be required as it could choose the indirect route through Idea.

Hindustan Zinc announced a special interim dividend of Rs 27.50 or 1375%. This would make the company which has announced and paid the highest dividend in absolute terms as well.

SEBI has finally pronounced judgement on the long pending insider trading case of Reliance Petroleum. SEBI has held Reliance and its associated companies as having indulged in insider trading and asked them to disgorge Rs 447 crs of profits and also pay interest for about nine and a half years from 29th November 2007 to date at 12% per annum. The interest amount would be bigger than the principle. They have also been debarred from trading in equity derivatives of any kind. What is surprising and intriguing is the timing of the judgement. It has happened in less than a month after the new SEBI chief has taken over. Probably the outgoing one preferred to keep on delaying this case and did so even through his extension. One wonders when justice would be done in a quicker time frame in this country. Over nine years is too long a time and this is not the end of the case as Reliance has the right to got to SAT.

Futures expiry for March happens on Thursday the 30th of March. The current value of NIFTY is higher than February by 168.50 points or 1.88%. This is clearly an advantage for bulls and they should be able to increase the lead into expiry and press home the advantage. This would also end trading for the financial year as well.

There was plenty of action in the primary market with two issues opening and closing and one listing. The listing was of the mega issue Avenue Supermarts Limited which raised Rs 1,870 crs and was oversubscribed a massive 104.59 times. The listing happened at a very well attended ceremony at the BSE on Tuesday the 21st of March. Shares were issued at Rs 299 and the issue closed at Rs 640.75 on listing day, a gain of Rs 341.75 or 114.29%. The shares consolidated thereafter and closed the week at Rs 616, a gain of Rs 317 or 106.02%. It was a huge success and has revived retail interest in the primary market with the issue receiving over 18 lakh applications, a new record.

The first issue was CL Educate which opened on Monday the 20th of March and closed on Wednesday the 22nd of March. The issue manged to get subscribed. The issue was subscribed 1.90 times with QIB portion subscribed 3.65 times, HNI undersubscribed at 0.21 times and Retail 1.63 times. Clearly the sector and the valuations were not liked by investors and hence the poor response.

The second issue was from Shankara Building Products Limited which was very well received. The issue opened on Wednesday the 22nd of March and closed on Friday the 24th of March. The issue was oversubscribed 41.88 times. The QIB portion was subscribed 51.62 times, HNI 90.68 times and Retail 15.35 times. There were 10.7 lakh applications received in all. This clearly explains that there is appetite for new paper where issues are aptly priced leaving something on the table. Investors have become savvy and are learning much faster than BRLM’s and Promoters.

Markets would be volatile in the coming week and would make one last attempt to break the previous highs made post-election results being declared. Hold your horses before re-entering the markets.