Shares of PNB Housing Finance Limited debuted on the exchanges and made stellar gains. The company had made a fresh issue for Rs 3,000 crs in price band of Rs 750-775. The issue received excellent response for the same. The anchor book saw 45 Anchor investors comprising of 71 entities being allotted 1.15 cr shares. The issue was overall subscribed 29.55 times but there were two large HNI bids which were rejected as a result of which the book was overall subscribed one time less at 28.45 times. The breakup of the same was 37.33 times QIB, 79.94 times HNI, 1.35 time’s retail and 0.45 times employee. The leveraged HNI has made a killing in this issue.

The discovered price on the BSE was Rs 863 and Rs 860 on the NSE. This price was higher by Rs 88 and Rs 85 respectively giving gains of over 10%. The share touched a high of Rs 902.95 and Rs 904 on the two exchanges and closed at Rs 890.60 and Rs 891.15 on the BSE and NSE respectively. The gains made an impressive 14.92% and 14.99%.

From the data above one can see that the volume traded was 394.53 lakh shares which was 1.02 times the IPO size of 387.09 lakh shares. Delivery percentage of traded shares was a hefty 45.77% while if looked at from IPO size it was marginally higher at 46.65%. If one looks at traded volume as percentage of IPO size minus the anchor allocation, the same is 1.45 times and delivery percentage 66.45%. This number is important as it indicates the floating stock in the market.

In terms of institutional trade General Atlantic has purchased a total of 56.52 lakh shares at a value of Rs 501.72 crs from the market. This has helped absorb whatever selling could have come from retail or the HNI who was making good money.

The company has announced the quarterly results for the July-September quarter would be announced on 15th November. These results would be keenly awaited as the performance would decide whether this share would trade in three digits or migrate to a four digit pricing.

A good debut for the share and a good Diwali gift for investors.

The inevitable correction came and in just four trading days the midcap and smallcap space look battered and bruised. The BSESENSEX lost 2.39% and NIFTY was down 2.36%. BSEMIDCAP lost significantly more at 4.24% and BSESMALLCAP was down 4.29%. As mentioned the price erosion was much more in the midcap and smallcap space.

Global markets too were weak and the trigger was the plausible outcome of US elections. While there can be only one winner in this election, the real loser would be America. The people of United States of America are unfortunately divided on who should be the next President and post the election a lot of time would be needed to heal the friction generated during the election. Anyway we would in all probability know the next president in about 48-72 hours from now.

There was a lot of news flow last week. The GST Council has announced rates for GST. There would be four rates at 5%, 12%, 18% and 28%. Half the items in the basket of consumer index would be at 0% so that inflation could be kept under check. The 28% rate would also have a cess for luxury goods and sin goods. The rate for gold has not been announced and would be done later in the month.

The Cyrus Mistry-Ratan Tata saga is likely to be a prolonged matter with the Indian Hotels directors approving the chairmanship of Cyrus Mistry. Three of Tata group companies would be meeting for quarterly results this week. The spat is becoming uglier and is sending wrong signals to investors.

Two non-bailable warrants have been issued against Vijay Mallya. One cannot be sure whether he has any intentions of retuning to India to settle matters or not.

The government sold shares of Larsen & Toubro through negotiated deals on Friday. These shares were held by SUUTI. The shares were sold at the floor price of Rs 1,415.66.

Reliance Industries along with its partners has been fined $ 1.55 billion in the ONGC gas case. Without doubt RIL would have to appeal against the same. For the time being the share price could be under pressure as the company is facing issues on many fronts whether it be gas or telecom.

Shares of PNB Housing and Varun Beverages would list on Monday and Tuesday respectively. While the former commands a premium, the latter struggled to get subscribed and had lack of support other than QIB’s. The listing of Varun would determine who was right (QIB’s) and who wrong (HNI & Retail).

Markets have fallen for five straight sessions since ‘Muhurat’ trading began for Samvat 2073. A technical bounce is in the offing. It will be just a technical bounce not the end of the correction. Use the same for reducing exposure and not adding fresh long positions. Trade cautiously in a week where volatility would increase with the presidential elections.