It was a wild, volatile and eventful week which got extended into Saturday as well. Expiry happened on Thursday the 29th February which was a leap day and till that event was over, markets were trading in negative territory for the week. Friday was the turning point and markets went into a new orbit all over again. Testing for the disaster recovery site of the exchange happened on Saturday and that led to the benchmark indices adding some more points to their ever-growing stature. At the end of it all, markets gained on four of the six trading sessions and lost on two. BSESENSEX was up 663.35 points or 0.91% to close at 73,806.15 points while NIFTY gained 165.70 points or 0.75% to close at 22,378.40 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.67%, 0.64% and 0.53% respectively. BSEMIDCAP gained 0.07% while BSESMALLCAP was down 0.39%. 

BSESENSEX, which was lagging NIFTY in terms of making a new high, did so on Friday and made a new high at 73,819.21 points. It again crossed this level on Saturday and made a new high at 73,994.70 points. NIFTY made new highs on Friday and Saturday and the new lifetime intraday high now stands at 22,419.55 points. Incidentally the gains of Friday were a massive 1,245 points on BSESENSEX and at 356 points on NIFTY. In relation to the weekly gains this was almost double when compared to BSESENSEX and a little more than double in terms of NIFTY. Clearly shows what the first day of a new series and news of the GDP in the third quarter growing higher than expectations can do to the markets. 

The Indian Rupee gained 4 paisa or 0.05% to close at Rs 82.90 to the US Dollar. Dow Jones had a fairly quiet and range bound week. It gained on two of the sessions and lost on three. At the end of the week, it was down 44.15 points or 0.11% to close at 39,087.38 points. 

In economic news, FPIs bought shares worth Rs 5,107 crs in February after being net sellers of over Rs 25,000 in January. Further the GDP numbers for Q3 of FY23-24 came at an impressive 8.4%. This was probably the reason why markets catapulted on Friday and virtually went into a new orbit. 

February futures expired on a weakish note in the last week of the series. The series ended with gains of 630.20 points or 2.95% to close at 21,987.38 points. 

There was a lot of activity in the primary markets in the week gone by. The week saw two listings, three IPOs open and close for subscription and another three companies had their roadshows and would be opening their issues for subscription in the coming week. 

The first company to list was Juniper Hotels Limited which listed its shares on Tuesday the 27th of February. The company had issued shares at Rs 360 and the issue was not very well received. The share opened at Rs 361.20 and closed 10% higher at upper circuit at Rs 397.30. At the end of the week, the share had gained strongly, closing at Rs 484.85, a gain of Rs 124.85 or 34.68%. 

The second share to list was GPT Healthcare Limited which had issued shares at Rs 186. The share debuted on the bourses on Thursday the 129th of February. The discovered price was Rs 216.15 and the share closed day one at Rs 200.75, a gain of Rs 14.75 or 7.93%. Over the next two days, the share lost ground and closed at Rs 191.75, a gain of Rs 5.75 or 3.09%. 

The first issue to open and close for subscription was Platinum Industries Limited which had tapped the markets with its issue for Rs 235.32 crs in a price band of Rs 162-171. The issue was oversubscribed an overall 98.73 times with QIB portion subscribed 151 times, HNI 141.69 times and Retail portion subscribed 50.45 times. There were 32.85 lac applications in all. 

The second issue was Exicom Tele-systems Limited which had tapped the markets with its fresh issue for Rs 329 crs and an offer for sale of 70.42 lac shares in a price band of Rs 135-142. The issue was subscribed 129.19 times. The QIB portion was subscribed 121.80 times, HNI portion was subscribed 153.04 times and Retail portion was subscribed 117.83 times. There were 36.79 lac applications in all. 

The third issue was from Bharat Highways Invit. The price band was Rs 98-100. The issue size was Rs 2,500 crs of which 15% was allotted to the sponsor. The issue was subscribed 8.18 times overall with the QIB portion subscribed 9.1 times and Non QIB portion subscribed 7.07 times. There were 2.17 lac applications in all. 

The week ahead has three IPOs opening. The first is from R K Swamy Limited which is tapping the markets with its fresh issue for Rs 173 crs and an offer for sale of 87 lac shares in a price band of Rs 270-288. The issue would open on Monday the 4th of March and close on Wednesday the 6th of March 24. The company is into the business of integrated marketing communications which operates a full-scale advertising agency and market research business verticals. 

The company has over five decades of presence. It reported revenues of Rs 780 crs for the year ended March 23 on a gross basis and a net revenue of Rs 300 crs. Its EBITDA margins were 20.97% and PAT margin at 10.42%. There is cyclicality in the business of the company and broadly speaking roughly 40% of its revenues come in the first half and 60% in the second half. Profitability is even more skewed and the company in my opinion earns about 25% of profits in the first half and 75% in the second half. 

The company had an EPS of Rs 7.03 for the year ended March 23 and based on this EPS the PE multiple for share is 38.41-40.96. The company has its niche and is one of the leading companies in the advertising space standing up against the MNCs and doing well. The market research gives it the cutting edge. One should invest in the company for medium to long term gains while making some listing pop could always happen. 

The second share to tap the markets is J G Chemicals Limited. The issue would open on Tuesday the 5th of March and close on Thursday the 7th of March. The price band is Rs 210-221. The company is the largest producer of Zinc Oxide in the country. Its products are used in the tyre and rubber industry and J G Chemicals in a leading supplier to tyre manufacturers in the country and globally as well. The company has plants in Kolkata and in Naidupeta in Andhra Pradesh. 

The company reported revenues of Rs 795 crs for the year ended March 23. Its EPS was Rs 17.32 and the resultant PE for the issue is 12.12-12.76. While there are listed players in the segment, they are smaller compared to the company. The company offers appreciation for investors looking to invest with a medium-term outlook as the company has diversified and added products in the pharmaceutical and agricultural space as well. 

The third company tapping the capital markets with its offer for sale is Gopal Snacks Limited. The issue opens on Wednesday the 6th of March and closes on Monday the 11th of March. The price band of the issue is Rs 381-401. The company is a manufacturer and marketer of ethnic Indian snacks, gathiya and western snacks. The company is located in Rajkot with two plants in Rajkot and near Ahmedabad and one plant in Nagpur. The company reported revenues of Rs 1,394 crs for the year ended March 23, an EBITDA margin of 14.07% and a PAT margin of 8.06%. The profit after tax was Rs 112 crs. The EPS for the year ended March 23 was Rs 9.03 and the PE multiple at 42.24-44.46. The company compares favourably with its listed peers like Pratap Snacks and Bikaji Foods. 

The company is present in ten states and two Union Territories with Gujarat being the largest state in terms of sales. It has 617 distributors as of date and is looking to expand its footprint. The sales distribution in terms of products having a MRP of Rs 5 is 75% while that of Rs 10 is 8.23%. This gives the company an edge that the number of people who buy their products repeatedly is very high. A price point of Rs 5 ensures a decent snack for the customer of hygienic food which is properly packed and served in a safe and hygienic condition. The share offers appreciation in the short and medium term and could also give a listing pop for the flippers. 

Coming to the markets in the coming week, there is a trading holiday on Friday the 8th of March. This would reduce the week to a four-trading session and also ensure that irrespective of the outcome of the trading sessions, there would be profit taking and lightening of positions on Thursday, ahead of the trading holiday. Markets got a booster dose on Friday and they now have the momentum to build further on it. Expect markets to continue to move up and aim for the 35 spill over from the January highs. Targets would be about 22,750 on NIFTY and 75,600 on BSESENSEX. These are levels which become targets for the indices to reach. Markets have support at levels of 21,900 on NIFTY and at 72,100 on BSESENSEX. This becomes the operating range for the markets. 

The strategy for the week would be to continue to focus on large cap stocks and book profits in small and midcap space. There is a certain amount of index management happening with Reliance Industries and HDFC Bank being the favourite big boys. Whenever markets look weak, these stocks are pulled up to give the feeling that all is well. While talks of a correction keep on coming, the mood is optimistic, momentum favours the bulls and markets need news flow to correct. Till then ride the rally.

Markets were on a roll last week and even though there was extreme volatility, they continued their upward march. NIFTY made a new high on Monday, Tuesday, Wednesday, Thursday and Friday, effectively on every trading session. BSESENSEX has yet to cross the high of 73,427.59 points which was made on 16th January. The new high made on Friday on NIFTY was at 22,297.50 points while BSESENSEX reached 73,413.93 points, short of previous high by a mere 14 points. This gives one to believe that sooner than later this would be breached and also confirming that NIFTY is yet to make another high on Monday or Tuesday. At the end of the week, BSESENSEX gained 716.16 points or 0.99% to close at 73,142.80 points while NIFTY gained 172 points or 0.78% to close at 22,212.70 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.70%, 0.76% and 0.74% respectively. BSEMIDCAP gained 0.01% while BSESMALLCAP was up 0.82%. Markets gained on three of the five trading sessions and lost on two. It maybe mentioned that on Thursday, markets opened in the red but rallied smartly to close in the positive. The intraday movement on Thursday between the low and the close was 1,076 points on BSESENSEX and 342 points on NIFTY. If one compares this to the weekly gains, it’s almost 1.5 times on BSESENSEX and double on NIFTY. The markets had probably a sharp intraday correction.

The Indian Rupee gained 8 paisa or 0.10% to close at Rs 82.94 to the US Dollar. Dow Jones gained on three of the four sessions and lost on one session. Dow gained 503.54 points or 1.30% to close at 39,131.53 points. 

Shares of Vibhor Steel Tubes Limited which had issued shares at Rs 151, listed at the bourses on Tuesday the 20th of February. The primary issue from the company was of a very small size with a fresh issue of Rs 72 crs in a price band of Rs 141-151. Normally such size issues come on the SME exchange but this was on the main board. The issue was oversubscribed 320 times overall and there were 28 lac applications in all. The issue debuted at Rs 421, a gain of Rs 270 or 178.80%. The share closed at upper circuit of Rs 442, a gain of Rs 291 or 192.71%. Every day thereafter, the share has been closing at lower circuit. On Friday, the share closed at the lower circuit of Rs 379.05, a gain of Rs 228.05 or 151.03%. Expect more circuits to follow till the ten days of trade-to-trade mechanism to get over. Friday was the fourth such session. 

The primary issue from Juniper Hotels Limited which had tapped the markets with its fresh issue of Rs 1,800 crs in a price band of Rs 342-360, managed to get subscribed. Considering the mood and the liquidity in the markets currently, it could be described as a lackluster response. Overall, the issue was subscribed 2.07 times. QIB portion was subscribed 2.96 times, HNI portion undersubscribed at 0.84 times and Retail portion subscribed 1.24 times. There were 1.21 lac applications. 

The week ahead sees the issue from Exicom Tele-Systems Limited tap the markets. The issue which opens on Tuesday the 27th of February would close on Thursday the 29th February. The issue consists of a fresh issue of Rs 329 crs and an offer for sale of 70,42,200 shares in a price band of Rs 135-142. The company is a power management solutions provider, operating under two business verticals, wherein the first is critical power solutions and the second is into manufacture and supply of Electric Vehicle supply equipment which includes EV Chargers for residential, business and public charging. 

The company reported revenues of Rs 723.39 crs for the year ended March 23. About 2/3rd of the revenue comes from the power business while 1/3rd comes from the EV business. Needless to say, the margins and the growth in the EV business vertical are significantly higher than the power business which is competitive. The company reported an EPS of Rs 3.38 for the year ended March 23. The PE multiple of the company is at 39.9-42.01. The price band is attractive considering the business opportunity and the sustained demand of EV chargers going forward. The issue would do well and be oversubscribed many times. Apply and hope that allotment happens. 

For the fixed income category of investors there is an issue from Bharat Highways Invit which opens in the week ahead. The issue consists of units which would be issued in a band of Rs 98-100. The issue would be of Rs 2,500 crs and the issue would open on Wednesday the 28th of February and close on Friday the 1st of March. 

The INVIT would have an initial portfolio of seven assets which are HAM assets from G R Infraprojects Limited. The HAM model consists of semi-annual annuities which are given by NHAI. The INVIT also has the right of first offer or ‘ROFO’ for the remining 23 assets owned by G R Infraprojects. There is also a ROFO right for any assets that would be made by G R Infraprojects for the next five years. 

The expected payout from this instrument is expected to be at 400 basis points higher than the current G sec rate. This would translate into an effective yield of between 11-25%-11.75%, making it attractive for investors with a fixed income return. As the assets are based on HAM model, there is no risk involved linked to traffic or toll collection whatsoever. Decent offer for investors looking at a fixed income as this would also take care of interest rates as and when the fall or rise as the project has been designed accordingly. 

The week ahead sees February futures expire on the last day of the month, 29th February. This is a leap year and the last time something like this happened was in 1996, 28 years ago. The current value of NIFTY is higher by 860.10 points or 4.03%. February series had begun at a level of 21,352.60 points. Currently, the bulls have complete control of the series and there is no way that they would allow the series to slip out of their hands. At best, the bears may attempt to pull something back, but that too looks difficult in light of what happened last Thursday. Expect bulls to rule the roost and press the pedal over the next few days riding into expiry. 

The markets are continuously making new highs and are in a bull grip. The breadth of the markets has become vulnerable and different stocks are moving on different days. Very clearly many of the stocks in this segment are seeing distribution and strong hands exiting the stocks and ownership moving into weaker hands. This phenomenon would continue for some time and it therefore makes sense to move into large cap stocks where there is safety. This has been advocated for a few weeks by me in my articles each time. 

Coming to the strategy in the week ahead, expect volatility and sharp intraday moves in both directions to be the order of the day. Trade with a positive mindset but keep on booking profits in sharp rallies. At the same time use sharp dips to buy and refrain from having large overnight positions. Sector rotation is on and would continue. The lows made on Thursday the 22nd of February at 72,081 on BSESENSEX and at 21,875 on NIFTY would act as strong supports. On the upside we have steam left as BSESENSEX is yet to make a new high.

Trade with a long mindset but cautiously.