The week gone by had plenty of action and moist importantly it built up on previous week’s strength and is now poised after months to move forward and upwards. Markets gained on three of the five trading sessions and lost on two. BSESENSEX gained 663.44 points or 0.86% to close at 77,763.91 points while NIFTY gained 214.85 points or 0.89% to close at 24,270.85 points. BANKNIFTY lost 238.55 points or 0.41% to close at 57,938.50 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.75%, 0.72% and 0.83% respectively. BSEMIDCAP gained 0.23% while BSESMALLCAP was up 1.00%. The lows of the week were made on Tuesday while the highs were made on Friday. This indicates some sort of change in trend as we have seen highs made on Friday after a couple of weeks signifying that markets are able to hold on to their gains. Highs made on Friday were at 78,157.52 points and 24,378.15 points while the lows made on Tuesday which was June futures expiry day were at 76,329.39 points and 23,829.20 points. A fairly narrow range of about 550 points on NIFTY and 1,800 points on BSESENSEX in a week. 

The Indian Rupee lost 74 paisa or 0.78% to close at Rs 95.33 to the US Dollar. Dow Jones gained on three of the four trading sessions and lost on one. Dow gained a massive 1,023.96 points or 1.97% to close at 52,900.07 points. Incidentally Friday was a trading holiday on account of US Independence Day which is celebrated on the 4th of July. 

June NIFTY futures expired on a quiet note. The bears won the series by a whisker but it was one where things could go in either direction. After the whole series was over, bears took it with series loss of 47.95 points or 0.20% to close at 23,865.75 points. 

Coming to the primary markets we had four listings last week. The first of the lot was from Turtlemint Fintech Solutions Limited which listed on Monday. Against the issue price of Rs 152, the share ended day one at Rs 135.40, a loss of Rs 16.60. By the end of the week, the share recovered marginally and narrowed the loss to Rs 138.55, a loss of Rs 13.45 or 8.85%. This issue was barely subscribed at 1.24 times overall with HNI portion remaining undersubscribed at 0.56 times. 

The second issue to list was Advit Jewels Limited which had issued shares at Rs 138 and listed on Wednesday the 1st of July. The share closed day one at Rs 178.15, a gain of Rs 40.15. Over the next couple of days the share lost some ground and closed at Rs 167.10, a gain of Rs 29.10 or 21.09%. 

The third share to list was Waterways Leisure Tourism Limited which had issued shares at Rs 808 and listed on Wednesday the 1st of July. The share had a very weak start and closed day one at Rs 667.35, a loss of Rs 140.65. Over the next couple of days, the share gained 10% each, closing at upper circuit to close at Rs 807.45, a minor rounding off loss of Rs 0.55 or 0. 07%. 

The fourth and final listing to happen was from CSM Technologies Limited which had issued shares at Rs 113. Shares which listed on Friday the 3rd of July, closed at Rs 107.35, a loss of Rs 5.65 or 5%. The going is tough for any IPO where there is expensive valuation or the business model is not understood. With a flood of IPO’s expected now onwards, one hopes that valuations are kept in mind when pricing the issues. The object of bringing the issue is not only to list and provide an exit to existing investors, but also ensure that the risk taker makes money going forward. 

There were two IPO’s which were open for subscription during the week. The first was from Aastha Spintex Limited which was open from Monday the 29th of June to Wednesday the 1st of July. The issue price band was Rs 125 -136. The issue size was Rs 170 crores. The issue was oversubscribed 5.05 times overall with QIB portion subscribed 3.59 times, HNI portion subscribed 8.29 times and Retail portion subscribed 2.54 times. There were 1.11 lakh applications. 

The second issue was from Knack Packaging Limited which was open from Wednesday the 1st of July to Friday the 3rd of July. The issue price band was Rs 161-170. The issue size was Rs 440 crores. The issue was oversubscribed 87.15 times overall with QIB portion subscribed 160.22 times, HNI portion subscribed 146.64 times and Retail portion subscribed 21.04 times. There were 19.74 lakh applications. 

The week ahead sees the IPO from Kusumgar Limited opening on Wednesday the 8th of July and closing on Friday the 10th of July. The issue is entirely an offer for sale for Rs 650 crores and is in a price band of Rs 398-419. Kusumgar is a manufacturer and solutions provider for fabrics made from polyamides and polyester filaments and polyurethane chemistry. It supplies to the aerospace and defense segments and also to automotive and active wear segments. The company has a fair mix of export and domestic sales which include the Armed forces. It reported revenues of Rs 692 crores for the year ended March 26 with a profit of Rs 98.2 crores. It’s in an interesting business and has favorable tail winds. The industry has huge entry barriers and qualification is time consuming and milestone linked. The working capital intensity can be a challenge considering inspections at various stages as many products in defense and aerospace are mission critical with zero tolerance. Invest with a medium term perspective of 12 to 18 months. 

Markets have held on to 23,800 on NIFTY and 76,000 points on BSESENSEX. On the upside they have moved up and seem set to cross the barrier at 24,400-24,600 in the coming weeks. Results for the April-June quarter would kick in from the coming week and the first major IT result is from TCS on Thursday the 9th of July. Not much is expected from these results as it was affected by the Iran-USA war. While everyone is aware of it, markets behave differently when results are declared, more so when in the same circumstances somebody does better than another. Results could be an opportunity to buy on dips. 

In terms of support the level of 23,800 would shift to 24,000 while the resistance would continue to be initially 24,500-24,600 and then moving up to 24,850-24,900 points. Time to start building a portfolio and keeping a close eye on companied declaring results.