Mindspace Business Parks Reit had a great day on listing and gained 10.5%. The company had tapped the capital markets with its fresh issue for Rs 1,000 crs and an offer for sale of Rs 3,500 crs and received excellent response and being subscribed 13 times. Earlier the company had allotted to 54 investors a total of 552.27 lac units for a total of 1,518.75 crs by way of anchor allotment. The highest allocation was made to Government of Singapore who was allotted 66,75,200 units worth Rs 183.57 crs. This formed 12.09% of the anchor allocation. The price band was Rs 274-275.

This being an issue under REIT there was a strategic investor quota of Rs 1,125 crs which was earlier allotted. The original issue size of the Rs 4,500 crs was reduced to Rs 1,576.25 crs. This part of the issue was divided into institution and non-institution with no distinction for retail and HNI. The issue was subscribed 13 times with QIB portion subscribed 10.61 times and Non-institution portion subscribed 15.83 times. There were 51,749 applications which makes the average ticket size Rs 25.81 lacs.

The price discovery saw a price of Rs 302 on both the exchanges. The volume traded at this price on price discovery was 5.22 lacs on BSE and 57.86 lacs on NSE, making a total of 63.09 lac shares. The unit made a high of Rs 308.90 on BSE and Rs 307.20 on NSE. The low was Rs 299 on BSE and Rs 300 on NSE. The closing price was Rs 303.87 on BSE, a gain of Rs 28.87 or 10.50%. On NSE. The closing price was Rs 303, a gain of Rs 28 or 10.18%.

The traded volume on the two exchanges combined was 288.59 lac units which was 0.17 times the IPO size. If one were to consider the non-strategic investor and non-anchor investor, this would be 0.43 times the size. The delivery volume was 252.25 lacs which was 87.41% of the traded volume. It was 0.17% of the issue size and 37.24% of the non-strategic investor and non -anchor investors. If one were to compare with the year ago issue of REIT from Embassy office park this issue has seen significantly higher volumes, higher delivery volumes and more significantly higher gains on listing day. The weighted average of the day’s trade was Rs 303.73 on BSE and Rs 302.81 on NSE.

In the case of Embassy office Reits, the company saw a volume of 31.82 lacs which was 2.01% of the IPO size. The delivery volume was 27,49,200 units which was 86.40% of the traded volume and 1.74% of the IPO size. If one were to consider the non-anchor and non-strategic investor portion, the traded volume was 4.48% of the IPO size and delivery volume was 3.87%. Comparing it with today’s issue of Mindspace, the numbers are not comparable whatsoever. Trading was significantly higher and so was delivery. It is clearly borne out that the instrument is being better understood now.

There were two buyers on day one on the NSE as per date. Nomura Investment bought 62,63,200 units at Rs 302.45 while Capital Income builder bought 51,81,400 units at Rs 303.44. These purchases were quite similar to the weighted average and indicates the interest on day one. Going forward the trading volumes would fall and so also the delivery volumes. The sae would pick up when corporate action in the form of dividend is to be announced.

When the concept of INVITS and the REITS were introduced the ticket size for minimum application was Rs 10 lacs which has been reduced in a phased manner to Rs 50,000 now, with a understanding that could become a retail product and means of investment going forward. Keeping this in mind there were as many as 30,061 applicants in the one, two and three lot category of the total 49,989 valid applications. This effectively means that 60% of the issue by number of applications were subscribed in the notional category by retail investors as the lot size in this issue was Rs 55,000. In the proportionate allotment method followed, these applicants numbering 30,000, there were just 2,000 successful applicants and they got 200 units each. If the idea is to encourage investment from retail investors there must be a separate bucket for them ot the allotment must first be for one lot and then proportionate. It is unfair that retail investors are at the receiving end of the allotment.

Markets behaved on expected lines and were under pressure in the week gone by and lost some ground. BSESENSEX was down 522.01 points or 1.37% to close at 37,606.89 points. NIFTY lost 120.70 points or 1.08% to close at 11,073.45 points. The broader indices saw BSE100, BSE200 and BSE500 lose 0.65%, 0.55% and 0.48% respectively. BSEMIDCAP was up 0.41% while BSESMALLCAP gained 0.43%. In sectoral indices, BSEIT gained 5.02% while BSEBANKEX lost 4.22%.

The Indian Rupee gained 2 paisa or 0.03% to close at Rs 74.81 to the US Dollar. Dow Jones lost 41.57 points or 0.16% to close at 26,469.89 points.

July futures expired on a positive note for the series but lost ground during the week. The series gained 813.25 points or 7.90% to close at 11,102.15 points.

In individual stocks the top gainer was Dr Reddy’s up Rs 458 or 11.27% while the top loser was HDFC Bank down Rs 86 or 7.69%.

Shares of Yes Bank issued through the mega follow on offer of Rs 15,000 crs were listed for trading on Monday the 27th of July. They settled down by the end of the week to trade at Rs 11.95, down Rs 1.70 or 12.45% for the week. Compared to the issue price they are down Rs 0.05. Volumes have reduced significantly and one should not be surprised if the share tends to make small gains from hereon in the coming week.

Results season is on in full earnest and they are a mixed bag. Clearly the period for which results are being declared April-June were the worst affected months due to covid-19. Banking results are under strain as there is moratorium which has been provided during the period. Subsequently provisions have gone up and recoveries from NPA’s are ruled out in this period. While this is not indicative of the future, one hopes that life returns to near normalcy as early as possible.

The public issue from Mindspace Business Parks Reit received excellent response and was oversubscribed just under 13 times. The QIB portion was subscribed 10.61 times while the non-institutional portion was subscribed 15.77 times. The issue received 51,749 applications and the average ticket size was 25.81 lacs. Retail investors who would get pro-rata application would be given a raw deal as there was no bucket for them nor would they get the typical one lot each and then prorata followed in equity issues. This is an area which needs urgent attention of the regulator who is looking to promote this as a product for investment by retail and has progressively cut the application size from Rs 10 lacs to Rs 50,000.

The controversial up-front margin for trading in the equity segment of the capital markets as proposed by SEBI has been extended by one month to September. The rule seems quite misplaced and would cause great hardships to the small investor. The idea that sale proceeds would not be available for purchase until the pay-out is done, will lead to cash volumes shrinking even further. The derivatives segment would remain unaffected where margins are released on trade being squared up and does not have to wait for settlement. This will ensure that investors are pushed towards speculation which is not their forte or their capability. Most unfortunate but stark reality.

Coming to covid-19, the world saw 182.35 lac patients, 6.92 lac deaths and 114.44 lac patients recovering. In India we saw 18.04 lac patients, 38,161 deaths and 11.87 lac patients recovering. Compared to the previous week the world saw 18.14 lac new patients, 40,538 deaths and 13.96 lac patients recovering. In India, there were 3.68 lac new patients, 5,979 deaths and 2.68 lac patients recovering.

Markets have had a great run from their lows made in March and seem to be ignoring all the global issues that are currently there. Liquidity, lack of conviction, left out feeling, waiting for correction to buy are some of the reasons for the present state of the market. In such a scenario it makes sense to be a contrarian and sell on rallies and buy on dips. Markets will remain volatile and therefore provide plenty of opportunities to buy and sell. Use them to your advantage.