Markets were under downward pressure in the week gone by and lost on four of the five trading sessions. BSESENSEX lost 1,774.93 points or 3.02% to close at 57,011.74 points while NIFTY lost 526.10 points or 3.00% to close at 16,985.20 points. The broader indices saw BSE100, BSE200 and BSE500 lose 3.21%, 3.22% and 3.18% respectively. BSEMIDCAP was down 4.53% while BSESMALLCAP lost 2.75%. In sectoral indices, just BSEIT and BSETECK saw upticks while everything else was down. The BFSI space was badly hit and many of the stocks in this sector suffered huge losses. The constitution of NIFTY is heavily skewed in favour of this sector and could weigh heavily in the coming week if markets and particularly the banking and NBFC space is under pressure.

Dow Jones lost 605.55 points or 1.68% to close at 35,365.44 points. The Indian Rupee was under pressure and lost 32 paisa or 0.42% to close at Rs 76.08 to the US Dollar.

The primary markets saw three listings during the previous week. The first of the block was Tega Industries which saw its share close on day one at Rs 725.50, a gain of Rs 272.50 or 60.15%. By the end of the week, the gains were reduced and the share closed with gains of 35.62%. The second share to list was Anand Rathi Wealth Limited which had issued shares at Rs 550. Shares closed on day one at Rs 583.50, a gain of Rs 33.50 or 6.09%. By the end of the week, these had reduced significantly to close at Rs 567.65, a gain of 3.21%. The third share to list was Rategain Travel Technologies Limited which had issued shares at Rs 425. The share had a very poor listing and saw its shares close day one at Rs 340.50, a los of Rs 84.50 or 19.88% down. This is indeed a poor listing and probably one of the few listings which has seen such a sharp fall on day one.

There is one IPO from CMS Info Systems Limited which opens in the coming week. The size of the issue which is entirely and offer for sale is Rs 1,100 crs. The price band is Rs 205-216. The issue opens on Tuesday the 21st of December and closes on Thursday the 23rd of December. The company is into the business of cash management and roughly 2/3rd of its revenues come from cash management services. The company had reported a net profit of Rs 169 crs on revenues of Rs 1,306 crs for the year ended March 2021. The fully diluted EPS for the same period is Rs 11.09. The PE for the stock is 18.49-19.48 times. Valuations look decent and should offer appreciation for investors investing with a medium-term outlook.

Quite a few issues would be listing next week. Prominent among them would be the issues from Shriram Properties Limited, C.E. Infosystems Limited, Metro Brands Limited and Medplus Health Services Limited.

Markets have been at the receiving end on three broad reasons. The first one is on continued selling by FII’s and they seem to be doing so now for over two months. The second is the fact that the US FED has announced the taper and the rate hikes that would happen in calendar year 2022. Global markets are worried about the same and this was reflected the way the Dow Jones reacted last week. Thirdly the scare about the new variant ‘Omicron’ seems to be unnerving various investors globally. Its not the number of deaths that have happened but the way the number of cases is rising rapidly across many countries. It becomes that much more important for citizens to observe social distancing and get themselves vaccinated.

Markets for the week ahead are very critically poised. The degree of comfort on NIFTY is just about 200 points away. Considering the fact that we lost over 250 points on Friday, this means less than a day’s fall. While this may or may not happen in a day, the possibility exists. One should be prepared for it. In case the markets go below this level and fail to recover, the fall could get precipitated in the coming days. One therefore has to be prepared to refrain from going long in the markets at current levels and play the market as it happens on a daily basis. In case we do not fall and markets recover, the rally should be used to book profits and wait for the fall which would come. Currently a sharp turnaround looks unlikely.

In conclusion, use market rallies to sell and wait for markets to decide their downward direction if any. The level required for a fall is a mere 200 points and may happen faster than one imagines. Therefore, play cautiously and avoid the temptation of attractive prices and bottom fishing.

Rategain Travel Technologies Limited which had tapped the capital markets with its fresh issue for Rs 375 crs and an offer for sale of 2,26,05,530 equity shares was oversubscribed 17.40 times. The issue had opened on Tuesday the 7th of December and closed on Thursday the 9th of December and had a price band of Rs 405-425.

The discovered price at BSE was Rs 364.80 at which price 18,468 shares were traded while it was Rs 360 at NSE where 20,51,051 shares were traded.

The QIB portion was subscribed 8.42 times, HNI portion was subscribed 42.04 times, the Retail portion was subscribed 8.06 times and the Employee portion was subscribed 1.37 times. There were 6.63 lac applications and on basis of lots, the retail portion of the issue was subscribed 7.42 times.

Earlier the company allotted 1,40,90,136 equity shares at Rs 425 to 20 anchor investors comprising of 34 entities. The highest allocation was made to the Government of Singapore who was allotted 16,44,650 shares or 11.67% of the anchor book. Along with its associate, the Monetary Authority of Singapore who was allotted 2.45% of the anchor book or 3,55,355 shares. The total allotment was 20,00,005 shares to 4 entities which comprised two FII’s and two domestic mutual funds. The FII’s were Ashoka and Nomura while the domestic funds were ICICI Prudential and Nippon. The top five anchor investors were allotted 76,47,185 equity shares or 54.27% of the anchor book.

The high of the day on BSE was Rs 382, the low was Rs 334.10 and the close was Rs 340.50. The loss was Rs 84.50 or 19.88%. On NSE, the high of the day was Rs 383, the low was Rs 333.85 and the close was Rs 340.05 a loss of Rs 84.95 or 19.99%.

The traded volume on the two exchanges combined was 190.04 lac shares which was 0.60 times the IPO size of 314.41 lac shares and 1.10 times the non-anchor portion of 173.51 lac shares. Delivery volume was 98.69 lac shares which were 51.93 % of the traded volume. It was 31.39 % of the issue size and 56.88 % of the non-anchor portion. The weighted average of the day’s trade was Rs 362.15 on BSE and Rs 361.33 on NSE.

In terms of institutional or bulk trade, four were reported on NSE. The first was a buy trade where Goldman Sachs bought 7,19,727 shares at Rs 361.71. The next three were sell trades reported on NSE. The first of these was from Rajasthan Global Securities, which sold 9,35,105 shares at Rs 362.18. The second was from Edelweiss Mutual Fund who sold 6,82,110 shares at Rs 360.7 per share. The third trade was from Integrated Core Strategies who sold 8,78,838 shares at Rs 356.22 per share. While one trades on the buy-side was for 7.19 lac shares there were three on the sell-side for 24.96 lac shares.

The overall traded quantity was poor yet the share appeared to be under pressure as the day progressed. While, the share appears to have had a poor listing as it is manged to close with day with losses of 20% on listing day, considering the fact that this was a new age company and claimed to be the first SaaS company it would be well below par. There could be more pain to follow in the coming days.

In conclusion, a poor listing and well below par for the company on day one, with more pain to follow.