It was a shortened week at the bourses with Monday being a trading holiday. Markets gained on three of the four trading sessions and lost on one. Sharp gains were registered on Wednesday and were followed up with a strong opening day of December series as well on Friday. The exit polls for the five states where elections were held indicate a close race but it appears there is change in the air. On balance the ruling party at the centre is likely to be an overall gainer post the results. This enthused the market and the strong rally in Dow too helped matters. At the end of it all, BSESENSEX gained 1,511.15 points or 2.29% to close at 67,481.19 points while NIFTY gained 473.20 points or 2.39% to close at 20,267.90 points. The broader markets saw BSE100, BSE200 and BSE500 gain 2.51%, 2.68% and 2.64% respectively. BSEMIDCAP gained 2.90% while BSESMALLCAP was up 1.91%. The rally was widespread and there were no sectoral losers. 

The Indian Rupee gained 8 paisa or 0.10% to close at Rs 83.29 to the US Dollar.  Dow had a great week and is now trading at a 52week high. Dow gained on the last four days consecutively and lost on the opening day of the week. Dow gained 855.35 points or 2.42% to close at 36,245.50 points. 

The week saw November futures expire on a positive note. The series gain was a big 1,275.90 points or 6.77% at 20,133.15 points. The first day of trading in the new series saw NIFTY gaining a further 134 points. 

The week gone by was all about new listings where we saw five main board listings in three days. The participation in four of the five issues was excellent and the shares performed well, beating the street’s expectations in terms of gains and appreciation. 

The first to list was IREDA which had issued shares at Rs 32. The opening price or discovered price was Rs 50 and the closing price was the upper circuit at Rs 59.99 on BSE and Rs 60 at NSE. The share gained Rs 27.99 or 87.50%. By the end of the week, the share had gained further and closed at Rs 62.75, a gain of Rs 30.75 or 96.09%. 

The second share to list was Tata Technologies Limited which had issued shares at Rs 500. The discovered price was Rs 1,199.95 and the high on listing day was Rs 1,400. The share closed day one at Rs 1,314.25, a gain of Rs 814.25 or 162.85%. There was profit booking on Friday and the share closed at Rs 1,220.20, a gain of Rs 720.20 or 144.04%. 

The third share to list was Gandhar Oil Refinery (India) Limited which had issued shares at Rs 169. The discovered price was Rs 295.40 and the closing price on day one was Rs 301.50, a gain of Rs 132.50 or 78.40%. The share lost ground on Friday and closed at Rs 280.35, a gain of Rs 111.35 or 65.89%. 

The fourth share to list was from Fedbank Financial Services Limited which had issued shares at Rs 140. The discovered price was Rs 137.75 and the closing price was Rs 140, unchanged to the issue price. On Friday, the share gained marginally to close at Rs 142.50, a gain of Rs 2.50 or 1.79%. 

The fifth and final share to list was Flair Writing Industries Limited which had issued shares at Rs 304. The discovered price was Rs 503 and the closing price was Rs 452.70, a gain of Rs 148.70 or 48.91%. Incidentally, the share closed day one at the lower circuit of 10% after a strong showing. Why such a poor performance is something which needs to be looked into. Further the lower circuit happened within 5 minutes of trading post price discovery.  

The five listings during the week show the increased power that retail investors have and the number of applications that they have made in these issues. There also seems to be better awareness amongst them that they did not wholeheartedly subscribe to the FedFina issue as the same looked expensive. This awareness is good but the price that they have paid during trading post listing, shows the euphoria that markets are in and retail investors have joined the band wagon. HNIs or high net worth investors overall numbers have increased which indicates that markets have seen new investors joining the investor pool. While this is good and welcome, there must be sanity and valuations need to remain reasonable. 

The listing week euphoria will subside and values find realistic levels sooner than later. Incidentally the institutional support which new listings normally find is also currently missing in these five listings. 

In economic data, GST collections for November 23 have come at 1.68 lac crs which is a 15% growth on a Y-O-Y basis. This augurs well for the economy and we are on track to cross 18 lac crs from GST on an annual basis going forward. Maybe even 19.5-20 lacs could happen. Even the GDP numbers were positive and came at 7.6% for the July-September quarter, beating RBI’s estimate of 6.5%. These factors and the strong showing in the US markets coupled with political enthusiasm pushed our markets to new highs. 

Coming to the markets in the week ahead, the results for the four state elections are out and it’s been thumping victories for the BJP in Rajasthan, MP and Chhattisgarh. Congress has won Telangana as a consolation. The victory also comes as anti-incumbency for BRS which was ruling for 2 terms and the inception or formation of the state.  Questions would now be raised on the opposition bloc I.N.D.I.A. which sees Congress getting weakened and state leaders becoming unwilling to operate under the leadership of Congress and its leader. 

There would be continuation of the momentum that is being witnessed in the markets in the week ahead. NIFTY has made new lifetime highs on intraday and closing basis and the BSESENSEX is not far behind. Expect BSESENSEX to do that on Monday. With new highs, expect the markets to open up new levels of a minimum 3% from the previous highs. Approximately 600 points on NIFTY and about 1,800 points on BSESENSEX is what we should be looking at.

NIFTY is at a new high and there is a 3% push from the previous high which is taken as a normal jump. The previous high was at 20,222.45 points and Gift City NIFTY indicates that we are at 20,638 points, a gain of 370 points. This leaves little or no room in the 3% band for NIFTY spoken of earlier in this article. Does that indicate there is more room for the indices to move up? Looks likely as we get closer to the general elections in April-May24. Expect markets to show a strong upward momentum even as the economy shows growth in GDP, GST collections and inflation fairly under control. On technical, by and large FPIs are net short in the market and we all know what a sharp rebound can do to the markets. 

Coming to the markets, first target for NIFTY 20,850-20900 corresponding to 69,250-69,400 points on BSESENSEX. On a broader range thereafter targets of another 5-7% higher, over the next 4-6 months pre-election are on the cards. On the downside, solid support exists at around 20,000 points on NIFTY and 66,700 on BSESENSEX. The strategy would be to ride the rally and enjoy the feeling with markets at new highs.

Trade cautiously.

The week gone by could be dedicated as a special IPO week as we had five issues opening and closing for subscription. They consisted of one PSU and four private issues. Tata Technologies was entirely an offer for sale while the remaining four were mixed issues with a fresh issue component and an offer for sale component as well. Markets gained on two of the five sessions, lost on two and were flat on one. At the end of the week, BSESENEX gained 175.31 points or 0.27% to close at 65,970.04 points while NIFTY gained 62.90 points or 0.32% to close at 19,794.70 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.18%, 0.20% and 0.22% respectively. BSEMIDCAP gained 0.69% while BSESMALLCAP was up 0.53%. The outperformance of the midcap and Smallcap space continues unabated. 

The Indian Rupee lost 10 paisa or 0.12% to close at Rs 83.37 to the US Dollar. Dow Jones gained on three of the four sessions and lost on one. Dow gained 442.82 points or 1.27% to close at 35,390.15 points. 

Coming to the IPO week, the first issue was PSU renewable energy finance company, Indian Renewable Energy Development Agency Limited or IREDA. The issue was subscribed 38.80 times overall and had 30.92 lac applications. The QIB portion was subscribed 104.57 times, HNI portion was subscribed 24.16 times and Retail portion was subscribed 7.73 times. The total bidding was for 1827.25 cr shares and the amount raised excluding anchor was Rs 58,472 crs. 

The second issue was from Tata Technologies Limited which was the darling in this round and fired the imagination of many new investors as well. The offer for sale was subscribed 69.43 times overall with QIB portion subscribed 203.41 times, HNI portion subscribed 62.11 times, Retail portion subscribed 16.50 times and shareholders reservation portion subscribed 29.20 times. There were 73.58 lac applications which is a new record by itself. The issue saw bids for 312.64 cr shares which was for a sum of Rs 156.32 lac crs. 

The third issue was from Flair Writing Instruments Limited which saw an overall subscription of 46.68 times with QIB portion subscribed 115.60 times, HNI portion subscribed 33.37 times and Retail portion subscribed 13.01 times. There were 17.02 lac applications and the issue garnered subscription for 67.28 cr shares for a sum of Rs 20,454 crs. 

The fourth issue was from Gandhar Oil Refinery (India) Limited which was subscribed 64.07 times overall with QIB portion subscribed 129 times, HNI portion was subscribed 62.23 times and Retail portion was subscribed 28.95 times. There were 28.47 lac applications and bids were received for 136.10 cr shares valued at Rs 23,001 crs. 

The final issue was from Fedbank Financial Services Limited which managed to get subscribed 2.20 times overall with QIB portion subscribed 3.51 times, HNI portion subscribed 1.45 times and Retail portion subscribed 1.82 times. There were 3.67 lac applications in all. The issue garnered bids for 12.30 cr shares at Rs 1,722.18 crs. 

If one were to add all the bids in the five issues and the anchor portion of roughly Rs 2,200 crs, total fund raise was Rs 2,62,179 crs or Rs 2.62 lac crs. This can at best be termed as a massive fund raise which took place. 

This probably explains why markets refuse to go down. There is enough liquidity to prevent the markets from falling or going down and the PE is high to prevent markets from going up. I believe this just about sums up the mood of the markets currently. 

Coming to markets in the week ahead, we have a trading holiday on Monday followed by five issues listing with one on Wednesday, three on Thursday and one on Friday. In between we have November futures expiring on Thursday the 30th of November. 

The first to list would be IREDA on Wednesday the 29th of November. This would be followed by Tata Technologies, Gandhar and FedFina on Thursday and followed by Flair on Friday. The reason for Flair listing on Friday is that two issues are listing at NSE on Thursday and there is therefore no room or venue for the listing. 

November futures is currently up 937.45 points or 4.97% up from the opening of the series at 18,857.25 points. With three days to go for the series to end, there is no way that bears can do much this time around. At best, they can regain some lost ground. It’s clearly a series that the bulls will take away. 

Listing of the five shares would be a great and euphoric moment. If one were to go by the grey market premiums all the issues barring one would have a great debut. The moot question would be how much of the listing day gains are they able to hold on to. I strongly believe that the shares listing would shave off quite a bit of the gains and close lower from the day’s high. The challenge would be to decide when successful applicants should book their profits. 

Friday would be a crucial day as the exit polls of the five states going to polls would be aired in the evening, before the results are announced on Sunday the 3rd of December. Markets would see some movement with expected exit polls late on Friday before closing. In any case there would be a knee jerk reaction to the outcome of the poll results on Monday morning and then markets would be back on track. 

The strategy for the week would be to play on any intraday volatility and keep light on overnight positions. The benchmark indices are quite range bound at this moment and need definite upward breakout for any meaningful up move. Key levels would be 19,900-19,950 on NIFTY and 66,300-66,450 on BSESENSEX. On the downside support exists at 19,600-19,650 on NIFTY and at 65,350-65,500 on BSESENSEX. There is no reason for this to break in the coming week on either the downside or upside. Globally even the Israel-Hamas conflict has reached some sort of peace and may get partially resolved going forward. 

In conclusion, trade cautiously in a week which has four trading sessions, November futures expiry and five listings. The week would end with state election results on Sunday. While the news flow is big, markets may remain range bound this week and react on Monday, indicating a breakdown or breakout. 

Trade cautiously.