The week gone by saw muted volumes and range bound movement. Markets seemed to do nothing whatsoever. All action seemed to have shifted to the primary markets where we have IPO’s raining. There is more than one IPO opening, closing or listing on every day of the week. The geo-political scene seems to have cooled off with no developments. No one wants to continue with the war, neither do they want to sign on the dotted line. In such a situation all one can do is wait. Wait for the inevitable breakout or breakdown which has to happen sooner than later. 

BSESENSEX lost 468.42 points or 0.60% to close at 77,540.83 points while NIFTY lost 131.25 points or 0.54% to close at 24,234.75 points. BANKNIFTY gained 270.85 points or 0.47% to close 57,761.95 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.59%, 0.59% and 0.40% respectively. BSEMIDCAP gained 0.01% while BSESMALLCAP was up 1.02%. Markets gained on two of the five trading sessions and lost on three. The high and low on BSESENSEX and NIFTY were at 77,928.68 points and 24,360.10 points while lows were at 76,822.89 points and 24,025.65 points. The highs were made at the open of the week on Monday while the lows were made mid-week on Wednesday. 

The Indian Rupee lost 30 paisa or 0.31% to close at Rs 95.77 to the US dollar. Dow Jones lost on three of the five trading sessions and gained on two. It was down 455.40 points or 0.85% to close at 53,277.01 points. Dhoot Transmissions 

The first of five listings was from Molbio Diagnostics Limited which had issued shares at Rs 807. Shares listed on Monday the 17th of August and closed day one at Rs 1,036.30. They closed the week at Rs 1,100, a gain of Rs 293 or 36.3%. 

The second share to list was Dhoot Transmissions Limited which had issued shares at Rs 871. Shares listed on Monday the 17th of August and closed day one at Rs 1,187.50. They closed the week at Rs 1,480.60, a gain of Rs 609.60 or 69.99%. 

The third share to list was Milky Mist Limited which had issued shares at Rs 140. Shares listed on Tuesday the 18th of August and closed day one at Rs 181.45. They closed the week at Rs 189.10, a gain of Rs 49.10 or 35.07% after an extremely volatile four days of trading. 

The fourth share to list was Beharilal Engineering Limited which had issued shares at Rs 285. Shares listed on Wednesday the 19th of August and closed day one at Rs 502.55. They closed the week at Rs 494.95, a gain of Rs 209.95 or 73.67%. 

The fifth share to list was Shiprocket Limited which had issued shares at Rs 97. Shares listed on Wednesday the 19th of August and closed day one at Rs 143.50. They closed the week at Rs 140.61, a gain of Rs 43.61 or 44.96%. 

By and large all shares have performed well and one wonders whether value exists only in the primary market. 

Let us have a look at the issues which closed during the week. Gaja Alternative Asset Management Limited was subscribed 32.98 times, Sunshine Pictures Limited was subscribed 105.81 times, Shankesh Jewellers Limited was subscribed 2.8 times, Horizon Industrial Parks was subscribed 1.52 times and Lalithaa Jewellery Limited was subscribed 66.62 times.

In terms of new IPO’s five new issues are hitting the markets in the new week with two of them having already opened. 

The first of the lot is Tempsens Instruments (India) Limited which has opened on Thursday the 20th of August and would close on Monday the 24th of August. The price band is Rs 285-300. The issue is Rs 650 crores with a fresh issue of Rs 95 crores and an offer for sale of Rs 555 crores. The company is India’s largest manufacturer of contact, non-contact temperature sensors manufacturer having a market share of approximately 10.5%. The PE multiple of the share is 34-21 to 36.01 times its year ended March 26 numbers. It is a niche industry and the industry is doing well. Investment is warranted looking at the future growth. 

The second IPO is from Augmont Enterprises Limited which is tapping the capital markets with its IPO which has opened on Friday the 21st of August and would close on Tuesday the 25th of August. The price band is Rs 750-788. The issue consists of a fresh issue of Rs 620 crores and an offer for sale of Rs 205 crores. The company primarily conducts its business through two online applications, the first being Augmont SPOT and the second Augmont GOLD FOR ALL.  The former is a B to B platform for buying gold in bulk for Jewellers and suppliers while the latter is an app for B to C where Augmont provides all sorts of services and products across the lifestyle of gold and its various uses as a financial instrument as well. While the value of transactions on the platform are close to Rs 95,000 crores, if one were to consider just the value of services rendered it is significantly less at around Rs 500 crores. The balance is the purchase and sale of gold. The company earned an EPS of Rs 40.45 and the PE multiple is 18.54 to 19.48 times. Interesting business model worth exploring investing in. 

The third IPO is from Skyways Air Services Limited which is tapping the capital markets with its IPO which would open on Monday the 24th of August and close on Thursday the 27th of August. The price band is Rs 131-138. The issue consists of a fresh issue of Rs 399 crores and an offer for sale of Rs 184 crores. The company is a multi-modal freight forwarding company with its focus on Air cargo. It is the largest air freight forwarder in the country with a six percent market share.  It reported an EPS of Rs 3.56 and the PE based on this multiple is 36.80-38.36. The business is growing and with India being a key global player, is well poised to reap benefits of India becoming a major manufacturing hub.

The fourth IPO is a small company Hytech Engineers Limited which is tapping the capital markets with its issue to raise Rs 60 crores in a fresh issue and Rs 75 crores as an offer for sale. The price band is Rs 50-53. The issue would open on Monday the 24th of August and close on Thursday the 27th of August. 

The fifth IPO is from Symbiotec Pharmalab Limited which is tapping the capital markets with its IPO which will open on Monday the 24th of August and close on Thursday the 27th of August. The issue price band is Rs 938-988. The issue consists of a fresh issue of Rs 150 crores and an offer for sale of Rs 1,607 crores. The company is R&D driven, science based pharmaceutical and Biotechnology Company offering products across the spectrum globally. The company PE is 49.37- 52.

The sixth IPO is from Annu Projects Limited which is an EPC player. It is raising Rs 175 crores through a fresh issue in a price band of Rs 94-99. The issue opens on Tuesday the 25th of August and closes on Friday the 28th of August. 

The seventh and last IPO is from Lumino Industries Limited which is tapping the markets with its IPO which opens on Thursday the 27th of August and closes on Monday the 31st of August in a price band of Rs 78-82. The issue consists of a fresh issue of Rs 500 crores and an offer for sale of Rs 200 crores. The company is a manufacturer of conductors, power cables and electrical wires and is also into EPC. The PE band is 11.87-12.48 times its March 26 earnings.

Coming to the markets, they have failed to break out or break down and they seem to be consolidating. Levels as mentioned last week at 23,800 on the lower side and 24,600-24,650 on the upper side continue to be ‘LAXMAN REKHA’ for the markets. Only if these levels are violated in either direction will markets move. Till then bide your time.

Trade cautiously.

Markets seemed to be in slow motion mode and were fairly quiet all of last week. Movements were narrow and it appeared the war had taken a pause as well as Donald Trump. More action was concentrated on the spate of IPO’s which were happening on the main board. In the coming week we have as many as five IPO’s which are opening and closing. At the end of the week, neither supports were breached nor resistances taken out. In summary, dull and boring and a listless week. BSESENSEX lost 489.92 points or 0.62% to close at 78,009.25 points while NIFTY lost 204.65 points or 0.83% to close at 24,366.00 points. BANKNIFTY lost 255.35 points or 0.44% to close at 57,491.10 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.47%, 0.41% and 0.37% respectively. BSEMIDCAP lost 0.13% while BSESMALLCAP was up 0.10%. Markets gained on two of the five trading sessions and lost on three. The highs on the BSESENSEX and NIFTY were at 78,670.98 points and 24,620.95 points respectively. Lows were made at 77,497.93 points and 24,366 points respectively. The highs were made on Monday while the lows were made on Wednesday. 

The Indian Rupee lost 26 paisa or 0.27% to close at Rs 95.47 to the US Dollar. Dow Jones lost on four of the five trading sessions and gained on just one. It lost 304.52 points or 0.56% to close at 53,732.41 points. 

There were three main board listings last week. The first of the lot was Ardee Industries Limited which had issued shares at Rs 53 and listed on Wednesday the 12th of August. The share opened at the high at Rs 73.60 and then closed on day one at Rs 67.13. It lost further ground during the remaining two days and closed at Rs 59.17, a weekly gain of Rs 6.17 or 11.64%. 

The second share to list was Leap India Limited which had issued shares at Rs 159. Shares listed on Friday the 14th of August at Rs 166, made a high of Rs 166.80 and closed at Rs 145.10, a loss of Rs 13.90 or 8.74%. 

The third and final share to list was Technocraft Ventures Limited which listed on Friday, 14th August at Rs 285 against an issue price of Rs 212. It made a high of Rs 334.60 and closed at Rs 311.15, a gain of Rs 99.15 or 46.77%. 

There are as many as five IPO’s opening and closing in the week ahead. The first of the lot is Lalithaa Jewellery Mart Limited which is tapping the markets with its 1,700 crores issue on Monday the 17th of August and closing on Wednesday the 19th of August. The issue consists of a fresh issue of Rs 1,200 crores and an offer for sale of Rs 500 crores. The price band is Rs 190-201. The company is a manufacturer of Jewellery and a retailer with presence in the southern states. It reported revenues of Rs 25,000 crores for the year ended March 26. So far the business model has been to sell Jewellery the cheapest and attract customers. It is a big player in the advance gold scheme, where a potential customer invests in buying Jewellery in instalments over 11 months and then takes Jewellery of the amount collected/deposited. It had over Rs 5,000 crores under this scheme. This is a scheme followed by almost all jewellers in the country. 

The second issue is from Horizon Industrial Parks Limited which is opening on Monday the 17th of August and closing on Wednesday the 19th of August. The issue consists of a fresh issue of Rs 2,600 crores in a price band of Rs 57-60. The company is a developer of large scale industrial parks for customers and offers built to suit and highly well designed parks with virtually all facilities and amenities for customers. It has roughly 28 million square feet built and with 94% leased and has another approximately 31 million square feet that would be developed in a phased manner over 2-4 years. It operates on a long lease basis.

The third issue is from Sunshine Pictures Limited. The issue consists of a fresh issue of Rs 172 crores and an offer for sale of Rs 110 crores. The price band is Rs 342-360. The issue would open on Tuesday the 18th of August and close on Thursday the 20th of August. The biggest risk in film making is the possibility of the picture being a disaster at the box office or being an average film and sometimes a super hit. The model of Vipul Amrutlal Shah, the promoter of the company is to make big actors, directors and other heavyweights from the film industry, partners in the venture that is launched. This ensures that the film is made with a lower budget and once the film breaks even, profits are shared. The track record of film industry related companies at the bourses have not been the best and hardly any have made money. Invest keeping the high risk in mind.

The fourth issue is from yet another jeweler, Shankesh Jewellers Limited. The issue consists of a fresh issue of Rs 274 crores and an offer for sale of Rs 93 crores. The price band is Rs 88-93. The issue would open on Tuesday the 18th of August and close on Thursday the 20th of August. The company is a manufacturer of handcrafted Jewellery and is a wholesaler, supplying gold Jewellery almost across the country. The fact that it makes handmade or hand crafted gives it an edge and higher margins. The company is a niche player and has limited size and reach and hence the IPO. 

The fifth and final issue is from Gaja Alternative Asset Management Limited, an AMC of funds. The issue consists of a fresh issue of Rs 450 crores and an offer for sale of Rs 100 crores. The price band is Rs 152-160. The issue would open on Wednesday the 19th of August and close on Friday the 21st of August. The issue is unique and has no comparable in the listed space in India. What is listed in India is the mutual funds AMC which are different from Gaja. Mutual funds have schemes in which investors invest and there is income which the AMC earns as basis points on the size of the AMC. In this company, there is a fee which is a percentage of the committed capital, carried interest on the performance of the fund and also the investment that the AMC does in the fund. This gives an overall higher returns when compared to AMC’s managing mutual funds. The size of the two is also not comparable where the mutual fund has AUM running into lakhs of crores while this is a few thousand crores. 

As mentioned last week in the article, the deluge of IPO’s took its toll on the markets and things were not the best. This week also has five IPOs lined up and the following week will have a similar number as well. All of this does not augur well for markets. Coming to the markets, supports were not tested and markets were well behaved, moving in a narrow range. At the same time they were unable to break out either. On the positive side we saw FPI’s doing select buying and very small selling if any. This gives one comfort that the markets are well balance currently. 

Support in the coming week is around 24,100-24,300 points and lower down at levels of 23,800 points. Resistance is around 24,650-24,800 points. It appears that neither of these two levels would get violated in the coming week. Results season is over for the quarter and now it would be time to take stock of the results and which sectors look good or not so good. 

The strategy would be to continue to trade long and refrain from large weekend positions as the war situation still shows no clarity. Oil is again climbing and is likely to become a crisis all over again. 

Trade cautiously.