This week the high profile NHPC listed and is included in the list. This is also the last week for Excel Infoways and having completed one month of being listed, we would cease covering this stock next week onwards.

The selling pressure saw the volumes increasing on the counter. The total delivery since listing or in the four days of trading is 49.23 cr shares or roughly 29.5 % of the IPO. Considering the issue size this is a huge number and confirms the fact that probably the share was overpriced and the hype created during the road show increased the interest of all the various segments concerned leading to an overall subscription of over 23 times and the HNI category of roughly 55-56 times.

Subscription to OIL India opens from Monday the 7th of September and remains open till the 10th of September. The response to NHPC post listing has been weak and led many people in the retail category who have not yet sold their shares to suffer a notional loss. The sentiment is affected and has become negative to a certain extent as regards new issues.

IOC has announced that its board of Directors would consider an issue of bonus shares on Sunday the 13th of September. The government is also considering the increase in price of gas being supplied by ONGC. This would help ONGC improve its margins as at the proposed rates there would be no loss suffered by ONGC on the gas front. This would be positive for ONGC and also for Oil India. These measures maybe unrelated but do give a sense that the OIL India issue needs to be supported and the present sentiment is not the best.

Adani power also saw huge selling pressure, with the share going below the issue price and closing below the issue price as well. This is for the first time since listing on 20th August that Adani Power has closed below Rs 100. The closing price was Rs 98.60.

There are two objectives to be achieved in the next four trading sessions. The first is to ensure that OIL India issue receives the proper response and the issue does well for itself befitting the size and stature. The second objective is to ensure that sentiment does not get further affected on account of the price fall in the shares of NHPC. I believe it would be interesting to see how NHPC performs and also the interest that is generated in the oil stocks such as ONGC, IOC, HPCL and BPCL in the next three days.

In conclusion NHPC is weak and would be under pressure during the next week. The stock is likely to see strong support around the 30-31 levels.  

The market cap of the index on a free float adjusted basis is Rs 41,721.59 crs. The value of the index as of yesterday 24th August 2009 is 1947.54. The base value of the index is 1000 and the base date is 3rd May 2004.

BSE has listed out the guidelines for the index which are listed below. 

1. A company seeking listing on the Exchange after completion of IPO shall be considered eligible for inclusion in the index. Follow-on public issues shall not be considered for inclusion in the index.
2. A scrip must have the minimum free-float market capitalisation of Rs. 100 crores on its first day of listing
3. A scrip will be included in the index on the third day of its listing (T+2) subject to fulfillment of the minimum free-float market capitalisation criteria stated above.
4. A scrip will be excluded from the index on the second Monday of the month after completion of two years of listing.
5. At all time a minimum of 10 scrips shall be maintained in the index. In case, there are less than 10 companies on account of possible exclusion after two years, the exclusion of such company shall be delayed till such time new inclusion is made in the index.
6. The maximum weight of any scrip shall be capped at 20%. The constituent weightage shall be reviewed at the time of inclusion/ exclusion of a scrip and on monthly rebalancing. However, between any rebalancing, weightage of any index constituent can exceed 20%

The list of stocks which number 48 as of date are appended below along with relevant data.

Total traded volume on day 2 was 5.32 cr shares and net delivery was 1.90 cr shares or 35.5% of traded volume. The broad markets saw the BSESENSEX gaining 431 points or 2.91 % and the NSENIFTY gaining 3.06% or 134.70 points respectively. With two days of trading as much as 10.53 cr shares or 42.3% of the shares offered to the public of the 24.885 cr shares have changed hands. I believe next week will decide the fate of this issue in the short term. If smart investors are accumulating the share, then once all the quick money makers leave the counter, it will be easy to take the counter up. If however the selling pressure is being thwarted by support from friendly quarters, there could be panic on a day when our broad markets panic. Interesting times are ahead next week for this stock. One must also remember that there is a very healthy and strong pipeline of over 130 IPO’s scheduled. A poor listing for NHPC could bring about a change in fortune for these in queue companies.

The total traded volume in Adani Power on both the exchanges combined was 26.07 cr shares. The issue was for 30.165 cr shares of which 5.28 cr shares were reserved and allotted to anchor investors who have a lock in. If we were to consider the net offer the same was 24.885 cr shares. Simply putting it means that 1.047 times the shares on offer were traded on the first day. The shares marked for delivery were 26057300 (2.605cr) and  60240064 shares (6.024 cr) on the BSE and NSE respectively making a total of 8.63 cr  shares or 33.1% of the total shares which were offered in the IPO.

This very high delivery indicates people wanting to exit on day one as they have not made money and therefore don’t want to continue holding the stock any further. Another way of looking at it is, that somebody or a group of people have bought shares because they believe it is at par and the waiting period and uncertainty of 20 days between the issue closing and listing does not exist. The pressure on the stock in the last hour was clearly visible and it appeared as if quarters close to management circles were supporting the counter and were determined to close the counter at atleast at the issue price. The stock finally closed at 5 paisa and 10 paisa higher on the BSE and NSE respectively. 

Looking at the markets where the BSESENSEX opened at 14930, a gain of 121 points and the close at 15012.32 a gain of 202 points, it was certainly a good day at the markets. The NSENIFTY gained 59 points and closed at 4453. The poor listing even on a day when the rest of the markets performed extremely well indicates, that investors are not happy with the listing. NHPC premium was down by a rupee and rough quotes of about Rs 5.50 are being indicated but the volume is thin and people are not to keen on taking any fresh positions in lieu of the lacklustre performance of Adani Power. 

The stock will be very closely watched tomorrow to see if there is any recovery or not and next week to see how the stock fares when world markets lead India down.

The share seems to be under pressure. The markets are very strong currently and could not have been better placed for the listing of any new share. 

More of Adani Power and what are the prospects in the short term at the end of the day. It may also be mentioned that following this issue is NHPC which is expected to list in the first week of September. 

The point to note in the issue is that grey market premium during the time when the IPO was on was Rs 9 -10, while the cost of interest for the HNI was just about Rs 3.50 assuming 11.25% interest and 13 days as the duration. As long as the share trades above Rs 104, the HNI will be making money.