The week gone by had a lot of action in which markets fell quite sharply. Friday was the worst day at start but things recovered in the end. At the end of it all, the week saw markets losing on four of the five trading sessions and gaining on just one. BSESENSEX lost 1,731.82 points or 2.26% to close at 74,914.06 points while NIFTY lost 502.80 points or 2.10% to close at 23,435.10 points. BANKNIFTY lost 763.10 points or 1.33% to close at 56,606.55 points. The broader markets saw BSE100, BSE200 and BSE500 lose 1.88%, 1.85% and 1.68% respectively. BSEMIDCAP lost 1.05% while BSESMALLCAP was up 0.10%. The highs and lows on the BSESENSEX and NIFTY were at 76,477.19 points and 74,160.16 points. On NIFTY they were at 23,890.00 and 23231.40 points. Incidentally the lows were made on Monday while the highs were made on Friday.   

The Indian Rupee lost Rs 1.07 or 1.13% to close at Rs 95.56 to the US Dollar. Dow Jones lost on three of the four trading sessions and gained on one. It was down 840.96 points or 1.57% to close at 52,573.29 points. 

Friday saw markets being hit by oil at close to $108-110 mark as Iran attacked the US Airbase in Jordan and caused heavy damage, (almost destroyed). The date, 9/11, 25th Anniversary. Strange coincidence but food for thought for technical analysts. US midterm elections are getting closer and there seem to be desperate measures being announced. The 5,000 dollar gift to every American if Trump and his party wins is a sad reflection to what USA has come down to. So be it. 

It has been raining IPOs on the main board over the last four weeks or so. Since the 17th of August as many as 22 issues have listed on the main board. In the coming week there would be another 11 issues listing taking this number to 33 issues in five weeks. 

The week ahead has the much talked about and awaited issue from NSE Limited hitting the markets. The issue is entirely an offer for sale of 12,64,36,650 shares in a price band of Rs 1,700-1,785. The issue would garner approximately Rs 22,562 crores at the top end of the price band. The issue would open on Thursday the 17th of September and close on Monday the 21st of September. The PE of the issue at the price band is 40.85-42.89. The issue is a proxy to the capital markets and the exchange is the dominant player in the capital markets with an overall market share of close to 90%. While the PE is lower than that of BSE, this becomes the upside for the investor going forward. There is no identifiable promoter and the company has 100% public shareholding implying that there would be no overhang of dilution for minimum public shareholding. However, post six months of listing there would be no lock-in of shares which could see shareholders exiting if prices have risen. 

Three of the recently listed IPOs saw a major pump and dump exercise happening on Friday the 11th of September. These were Shankesh Jewellers, Sunshine Pictures and Molbio Diagnostics. Unprecedented volumes, huge volatility and most importantly price reversals were the order of the day. It’s time for investors to be cautious as this has become the order of the day. 

The week ahead has a trading holiday on Monday on account of Ganesh Chaturthi. This is the day when Lord Ganesh is welcomed with open arms into millions of households across the country. He remains a royal guest for anything between 1-11 days before he is immersed in water whether it be the sea, lake or river. A most auspicious time for people from all religions. 

The week gone by saw markets coming very close to the last bastion of 23,100 points and rebounding. This level of 23,100 would act as a strong support with a fall back to 22,800 points in case markets took a dive. On the upside we have resistance at 23,800 points, a level at which markets have bounced quite often. 

The strategy would be to lie low and watch carefully. Markets cannot move up with oil around 108$, inflation rearing its ugly head and every possibility that a rate hike in the US is in the offing. If Trump manages to hold on to the rate hike, it could mean two, post elections. Use only sharp dips to make purchases or otherwise remain on the sidelines. Tough times ahead.  

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.