The most optimist of pollsters gave a range of 265-285 seats to the BJP in Uttar Pradesh and the party delivered 324 seats out of the state’s strength of 403. The lower end of the pollsters were at 165 which effectively meant that the broad range was from 165-285. What this meant is that BJP has a more than 3/4th majority in India’s most populous state. The party did not have a single Muslim candidate and therefore the strength of the community in the new house stands that much diluted.
Who voted for the party which has ended up a 40% vote share? Very clearly the minority community particularly there women who were fed up of the Triple Talaq issue have backed Modi. It has rightly been said that with this issue voting on caste has come to an end. This is the beginning of aspiration politics and parties would have to deliver on their commitments to win mandates.
BJP won Uttar Pradesh and Uttrakhand with sweeping mandates. Congress riding the anti-incumbency issue captured Punjab. In Goa there was a neck to neck race where BJP managed to get past with the help of their former allies linked to the condition that Manohar Parrikar be brought back as Chief Minister. He has been given time to prove his majority. In Manipur where the Congress was ruling and the BJP did not have any seats they have managed to win as many as 21 and have staked claim with the help of 2 regional parties.
The fate of the other parties in UP is interesting. Mayawati the BSP Chief is currently a Rajya Sabha member and her term expires in April 2018. Her present position is not enough to get re-elected. The Congress which had 28 seats in the outgoing house is reduced to 7. It has lost six out of 10 seats in the Rae Bareily and Amethi. Akhilesh Yadav led Samajwadi party has been reduced to 47 seats against the 220 plus that they had earlier. Not sure whether the hand rocked the cycle or vice versa. Very clearly the alliance and the Pari-War took its toll on the party.
Coming to AAP who had claims to win both Punjab and Goa and form the next governments, the party won 20 of the 117 seats while it failed to open its account in Goa. The Delhi CM was all ready to celebrate the event and had prepared for a full scale party at his house which saw no guests arriving. His party candidates lost deposits in 20 seats in Punjab and 33 in Goa. His work is now cut out and he would have to concentrate on the upcoming Delhi municipal elections where a rejuvenated BJP would go after him with all guns blazing.
This massive mandate by the people would force political parties to think whether their campaign against demonetisation backfired. Secondly the obstructionist policy adopted in parliament is the right way going forward. I strongly believe that the youth of today are against this and will voice their opinion through the ballot whenever the occasion arises. Similar is the case of the minority women who have defied the community and come out to vote in such large numbers.
The position in Rajya Sabha would undergo a change when elections are held for retiring members but not significant enough for the NDA to have a majority. However in the Presidential polls to be held in July 2017, the NDA is almost there with a shortage of just about 20,000 votes compared to all others put together. There would always be parties like BJD, AIADMK and probably BSP considering Mayawati’s predicament who would support.
A recharged and roaring Narendra Modi would now face parliament and take on in a head strong way the disruption which is a norm. The entire party would be in a similar mood and probably one would see substantive legislative action being done. Secondly buoyed by the referendum on Notebandi there would be stage two action like the Benami Property bill and other action against black money coming in the next few months.
Markets would love what has happened and would salute the same with opening at new lifetime highs. Alrready in Singapore where the NIFTY is traded it has touched a level of 9,200 which is almost 1% higher than the 9,119.20 level of 4th March 2015. The corresponding level on the BSESENSEX was 30,024.74 points. Today’s action would consist of euphoria and short covering. Readers would recall that all of last week the markets did virtually nothing and were virtually flat. The net change on the BSESENSEX was positive 113.78 points or 0.39% which closed at 28,946.23 points. NIFTY gained 37 points or 0.42% to close at 8,934.55 points. With a mini referendum happening with elections to five states one expected markets to be more volatile. Probably the huge range given by pollsters after exit polls got the market confused.
Post the euphoria coupled with fresh buying as we are at new highs coupled with short covering there would be the customary profit taking which would allow the markets to catch their breath and also consolidate at new levels. By this time the financial year would have ended and people would be looking at results for the quarter January to March 2107 and also annual results. The market would then look at new legislation and the upcoming introduction of GST in July 2017.
An event which got partially side lined in the BJP victory is the success of Avenue Supermarts Limited IPO which was oversubscribed a massive 104.59 times. The IPO was to raise Rs 1,870 crs in a price band of Rs 295-299 through a fresh issue. The QIB portion was subscribed 144.62 times, HNI 277.74 times and Retail 7.51 times. A total of 18.5 lakh applications were received which is more than 50% the previous best of 12 lakhs received in BSE Limited. The company has garnered a total subscription of just under Rs 1.39 lakh crs.
Enjoy the unfolding rally where left out feeling would creep in by the end of the day. Have a plan to book profits and wait with cash to re-enter at better valuations and without euphoria or frenzy.
