NIFTY hit a lifetime high while BSESENSEX is about 250 points away during course of trading last week. India celebrates Diwali this Thursday and Friday and markets have already begun celebrating. Mood is optimistic and there is momentum as well. A note of caution needs to be observed as results and performance do not match the exuberance being witnessed.
TCS declared results which were better than what the street expected, however on comparison they were flat. Reliance Industries declared an excellent set of numbers and heartening was the fact that ‘Jio’ has made cash profit. The entire market results would certainly not follow the above trend.
The primary market saw two issues open for subscription last week. The first was from IEX or India Energy Exchange which had confusion about the subscription by FPI’s in the IPO. The anchor allotment had to be cancelled to these FPI’s and the same was added back to the QIB category. There was an exit route given to other shareholders to allow them to withdraw their application of they so decided. The issue was subscribed 2.28 times overall with QIB portion subscribed 2.56 times, HNI undersubscribed at 0.85 times and Retail subscribed 2.61 times. One wonders at the callous attitude of merchant bankers and they are taking such big calls on mere interpretations. If foreigners cant invest in a primary offering whether it is by way of an offer for sale or fresh issue is running to fine a line and risks the wellbeing of the issue.
The other issue for subscription last week was the mega insurance issue from GIC RE. The issue was subscribed 1.36 times with QIB portion subscribed 2.25 times, HNI undersubscribed at 0.22 times and Retail undersubscribed at 0.63 times. The size of the issue was over Rs 11,000 crs. There were 6.56 lakh applications and the average subscription in the retail category was about Rs 39,000 against a normal average of closer to Rs 18-20k.
With the IPO of GIC RE over, the last month or so has seen three issues in the insurance space and collectively they have raised about Rs 25,000 crs. The two other issues were from ICICI Lombard and SBI Life insurance. Two more issues are waiting on the side-lines with New India expected to hit the markets in early November and Reliance General Insurance in the second half of November.
Two IPO’s would debut this week with Godrej Agrovet listing on Monday and MAS Financial Services Ltd listing on Wednesday. Both issues had received excellent response and were very well subscribed. They should list with gains of around 25-30% over the issue price which incidentally is almost identical at Rs 460.
There is a trading holiday on Thursday and Friday for Diwali. There would be a special ‘Muhurat’ session held on Thursday for welcoming the new Hindu calendar Samvat 2074. It would begin with a bang irrespective whether fireworks are banned or not. Enjoy Diwali and the fireworks but be cautious as valuations have literally gone through the roof.
Wishing all readers a Happy Diwali and a Prosperous New Year.
