There was mayhem on Dalal Street after USA resumed its pounding on Iran. They were bombed day and night and the war took on a new proportion. Iran continued attacking US assets in the Middle East and caused enough damage for USA and its allies to realize that Iran is no easy prey. But, it caused oil to flare up and quote at 102$ for Brent before easing to quote at 98.38$, but way above comfort zone. Our markets lost on all five trading sessions. BSESENSEX was down 2,091.68 points or 2.68% to close at 76,059.77 points while NIFTY lost 566.85 points or 2.33% to close at 23,767.45 points. BANKNIFTY lost 1,827.90 points or 3.12% to close at 56,693.50 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.93%, 1.83% and 1.85% respectively. BSEMIDCAP was down 1.69% while BSESMALLCAP lost 2.14%. Only one sectorial index managed to close marginally in the green, BSEAUTO which was up 0.10%. The intraweek highs which were made at the open on Monday were at 78,151.45 points on BSESENSEX and at 24,266.10 points on NIFTY. The lows were made on Friday at 75,474.43 points and at 23,606.30 points. The recovery on Friday was sharp if one were to consider the blood bath during the week. Does this augur for a better week going forward, would be a big question mark. 

The Indian Rupee was under pressure and lost 28 paisa or 0.29% to close at Rs 96.68 to the US Dollar. Dow Jones lost on three of the five trading sessions and gained on two. It lost 199.15 points or 0.38% to close at 51,947.25 points. 

There were three listings on the main board last week. The first was from SBI Funds Management Limited which had issued shares at Rs 574. Shares listed on Tuesday the 21st of July at Rs 610 and closed at Rs 609.90. By weekend the share slipped and closed at Rs 587.20, a gain of Rs 13.20 or 2.30%. The performance could be termed as disappointing. Grey market premium during the tenure of the IPO opening, bidding and even up to listing day moved between Rs 90-100 and reality is in front of us. This clearly demonstrates that grey market and listing are two different planets and must be looked at in the same manner.   

The second share to list was Alpine Texworld Limited which had issued shares at Rs 105. Shares listed on Tuesday the 21st of July at Rs 105 and closed at Rs 99.75. By weekend the share slipped and closed at Rs 85.60, a loss of Rs 19.40 or 18.48%.

The third share to list was from Caliber Mining and Logistics Limited which had issued shares at Rs 424. Shares listed on Friday the 24th of July at Rs 504 and closed at Rs 528.50, a gain of Rs 104.50 or 24.65%. 

The week ahead has a mega issue from Manipal Health Enterprises Limited which is raising Rs 9,275.22 crores in a price band of Rs 560-590. The issue is a fresh issue with a small offer for sale component of Rs 1,275 crores. The issue opens on Wednesday the 29th of July to Friday the 31st of July. Manipal Hospital is the largest hospital chain in the country with domination in presence in three of the markets it is present in. These include in Sothern India, Eastern India and micro markets of Pune and Western India. Its new upcoming hospital in Mumbai will further increase its size and presence. It plans to add over 3,000 beds to its existing size of 13,000 beds approx. Healthcare in the organized sector and particularly in corporate sector is rapidly growing in the country and slowly and surely it is getting better organized with large groups entering the fray. This would be someone coming right at the top in terms of capacity and reach. Investment is warranted for the medium to long term.

The week ahead sees July NIFTY Futures expire on Tuesday the 28th of July. The current level of NIFTY at 23,767.45 points is a mere 98.30 points or 0.41% lower than the series open of 23,865.75 points. The series is wide open and anything can happen in the two days remaining. With the kind of fall witnessed last week and the late recovery on Friday, I would tilt the battle in favor of the bulls. Expect them to carry the series through. 

Coming to the markets in the coming week, markets broke through the resistance band and then pulled back. All is not lost but we are trading on thin ice. The lows made on Friday at 23,606 points or say 23,600 points are the last support for the trading band of 23,800-24,300 points. If this low were to break, we would open up levels of 23,100-23,300 points. On the upside if the low is not violated and we manage to move up to levels of 24,000 points again, the band would be restored and we would likely see the band taking markets upwards. Very clearly its crucial time in the week ahead. 

Strategy would be to keep strict stop losses and trade. Number of primary market issuances would add to the pressure in the market place besides gulf tensions. 

Trade cautiously.

It was an eventful week at the bourses and they demonstrated strength despite the going-on in the Middle East. Markets are looking at more dynamics other than just the immediate geo-political one. It could also be that they have probably understood that for Donald it is yet another day and he would continue making his money without being bothered who is paying for it. Let’s leave politics at that because it gets personal and uncomfortable. BSESENSEX gained 582.05 points or 0.75% to close at 78,151.45 points while NIFTY gained 127.40 points or 0.53% to close at 24,334.30 points. BANKNIFTY gained 475.50 points or 0.82% to close at 58,521.40 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.29% and 0.14% respectively while BSE500 was flat. BSEMIDCAP lost 0.22% while BSESMALLCAP lost 0.14%. Very clearly the broader markets were under pressure on Friday, the day the benchmark indices had a great showing. BSESENSEX gained on four trading sessions while NIFTY gained on three trading sessions. 

The Indian Rupee was under pressure and lost 93 paisa or 0.97% to close at Rs 96.40 to the US Dollar. Dow Jones gained on two of the five trading sessions and lost on three. It was down 490.61 points or 0.93% to close at Rs 52,146.40 points. 

The escalation of tensions caught the world in its crossfire. At the same time even Ukraine has suddenly become more aggressive and one gets the feeling that nations having the oceans, straits and waterways are suddenly becoming aware of the importance of such geographical locations. The war between USA and Iran has moved up many levels in the last week and could take a serious turn considering that retaliation by Iran on US allies in the Middle East will also cause unrepairable damage sooner than later. For us in India, developments with our neighbor Pakistan cannot be ignored. A country always involved in exporting terrorism is now facing the brunt with some of its provinces including POK. While its tit for tat, the worrisome factor is that internal strife in Pakistan is increasing alarmingly. 

Coming to the IPO markets, we had two listings last week. The first was from Kusumgar Limited which had issued shares at Rs 419 and listed on Wednesday the 15th of July. Shares closed day one at Rs 604.45, a gain of Rs 185.45. By weekend, the share gave up some of its gains and closed at Rs 575.90, a gain of Rs 156.90 or 37.45%. 

The second share to list was Laser Power and Infra Limited which had issued shares at Rs 214. It listed on Thursday the 16th of July and closed at Rs 262.85, a gain of Rs 48.85. On Friday it hit upper circuit of 10% and closed at Rs 289.10, a gain of Rs 75.10 or 35.09%. 

The issue from SBI Funds Management Limited received excellent response and was subscribed 41.66 times overall. QIB portion was subscribed 140.11 times, HNI portion 22.51 times and Retail portion 3.6 times. There were 62.59 lac applications in all. The share would list on Tuesday the 21st of July. 

The issue from Caliber Limited has opened on Friday the 17th of July and would close on Tuesday the 21st of July. The issue is for Rs 450 crores with a fresh issue component of Rs 400 crores and an offer for sale of Rs 50 crores in a price band of Rs 402-424. The company is in the business of removing overburden in the mining industry and coal excavation. It provides the full array of equipment and logistics required for mining. It’s the first company of its kind on a standalone basis to be listed in this sector and appears promising for the medium to long term. The share is reasonably priced and offers appreciation in the short term and certainly for the medium to long term. On a growth perspective beside larger number of contracts the company is also entering iron-ore mining and has got exploratory mining license for rare earth minerals in Sindhudurg. 

While on the primary markets, one disturbing trend has begun in recent times. Recent apps on the social media and digital technology have started displaying unpublished information (UPI) in regards to price band of IPO bound companies without their price band advertisements being published. This could lead to serious repercussions going forward as there would be many violations which would become difficult to prove. I believe as a responsible intermediary and person connected with the capital markets for decades, it is my duty to alert and inform. One hopes the regulator would take action at the earliest. Full details could be shared on request. Let me take the latest example. Two issues are having their roadshows in Mumbai today, Monday 20th July. They are Lohia Corp Limited and Indo-Mim Limited. These apps have given prices which are not what the company has declared. In the case of Lohia Corp, the app shows 400-426 while the declared price is 404-425. Similarly for Indo-MIM, the app shows 465-490 while the declared price is 461-485. This amounts to misleading and is probably being done to confuse retail investors and more importantly to activate grey market transactions. Things which SEBI is dead against. Time for the SEBI Chairman to show how he can regulate these activities. One other actionable point is that even apps from online brokerages start displaying such price communications. 

Mega results from Reliance and about four banks were declared over the weekend. By and large the story is intact except in the case of one bank. I believe this could be a reason for markets opening on the upside on Monday. Levels of 23,800 on NIFTY would act as solid support and a tighter stop loss could be kept at 24,100 points for any long positions. On the upside while 24,600 points is the trigger for fresh longs, in case this level is broken out we could see resistance at 24,850-24,900 points. Keep in mind this would be a break out after a very long time and hence there would be hurdles in the way. The strategy would be to keep long positions and monitor two other things. Firstly oil going above 90$ would start hurting and secondly, Iran hurting and attacking infra assets where USA has it troops stationed. 

Trade cautiously.