Shares of IRCTC (Indian Railway Catering and Tourism Corporation Limited) listed on the bourses yesterday and had a dream debut. The company had launched its offer for sale of 2.016 cr shares in a price band of Rs 315-320 and was oversubscribed 111.95 times. The price discovery on BSE saw a price of Rs 644 while on NSE it was Rs 626.

The traded volume at price discovery was 6.10 lac shares on BSE while it was a staggering 36.89 lac shares on NSE. The high of the day was Rs 743.80 on BSE and NSE. The low of the day was Rs 625 on BSE and NSE. The close was Rs 728.60 on BSE, a gain of Rs 408.60 or 127.69%. It was Rs 727.75 on the NSE, a gain of Rs 407.75 or 127.42%. This performance by any PSU is a record by itself beating by a comfortable margin the performance of Power Grid. Power Grid Corporation of India Limited had listed on 5th October 2007 its shares which were offered at Rs 52. The issue was subscribed 64.82 times with QIB portion subscribed 115.90 times, HNI portion subscribed 40.34 times and retail portion 6.77 times. The issue opened at Rs 85, made a high of Rs 109.40 and closed at Rs 100.65, a gain of Rs 48.65 or 93.55%.

On a lighter note DIPAM would do well to take note of the fact that listings in October are good for PSU shares with Power Grid and IRCTC both happening in October.

In contrast the issue of IRCTC was subscribed 108.79 times by QIB’s, 354.42 times by HNI’s, 14.94 times by Retail investors and 5.82 times by Employees. The total issue was subscribed 111.95 times. The difference in response to IRCTC was the reintroduction of convenience fee which was discontinued when demonetisation took place. This reintroduction from September 2019 was the game changer for the valuation.

The total traded volume on the two exchanges combined was 507.10 lacs which was 2.51 times the IPO size of 201.6 lac shares. Delivery volume was 154.11 lac shares which was 30.39% of the traded volume but a staggering and mind boggling 76.44% of the IPO size. Weighted average of the day’s trade was Rs 691.97 on BSE and Rs 692.91 on NSE, clearly indicating that the share was under no pressure at any point of time. It also closed a good Rs 35-36 or 5% higher than the weighted average. This kind of delivery of the issue size is unprecedented as it implies that more than half the QIB’s have also sold on day one. One assumes that HNI’s who are leveraged would have cashed out while Retail investors lucky to have got 40 shares would have looked to book profits as a Diwali bonus.

There was only one institutional trade reported on the NSE. Reliance Mutual Fund bought 15 lac shares at the discovered price of Rs 626. With 76% of the shares offered in the primary issue changing hands very clearly there are people who believe that they have made enough money and hence exited. The other way of looking at it is that an equally large number of people believe that there is more to happen even now. Very clearly the share rally is not yet over and the July-September results would determine the course of action going forward. The convenience fee which in the current year 2019-2020 would be charged for seven months has the potential to double the profits for this year compared to last year as there was no convenience fee last year. The railways/government had granted IRCTC Rs 88 crs for the full year as compensation.

Whether it is the business model which is liked by investors who bought yesterday or it is a new rating for PSU stocks only time will tell. History will record the 14th of October 2019 as the day IRCTC made history.

The Week gone by began on a positive note and gained on two of the four trading days, while losing on the remaining two. BSESENSEX was up 453.77 points or 1.20% to close at 38,127.08 points while NIFTY gained 130.30 points or 1.17% to close at 11,305.05 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.93%, 0.94% and 0.83% respectively. BSEMIDCAP gained 0.49% while BSESMALLCAP lost 0.29%.

The top sectoral gainer was BSEBANKEX up 1.37% while the top loser was BSEHEATHCARE down 0.99%. In individual stocks the top gainer was Bharti Airtel up 12.64% at Rs 382.65. The top loser was India Bulls Housing Finance down 14.46% at Rs 209.95.

Dow Jones gained 241.87 points or 0.91% to close at 26,815.59 points. The Indian Rupee lost a tad and was down 14 paisa or 0.20% at Rs 71.02.

Shares of IRCTC would be listed on Monday the 14th of October. This would be the fourth Railway company to be listed on the bourses. Shares of the company were issued at Rs 320 and the issue of 2.016 cr shares was oversubscribed 111 times. The premium being quoted on the share is about Rs 240 indicating a 75% gain from the issue price. To welcome the new entrant from the Railway Ministry, the other three railway stocks had a great outing on Friday and did well for the week. Ircon International gained 3.94%, Rites gained 8.64% while RVNL was up 11.96%.

The best listing from the PSU stable till date has been from Power Grid Corporation of India Limited. The company had listed on 5th October 2007 its shares which were offered at Rs 52. The issue was subscribed 64.82 times with QIB portion subscribed 115.90 times, HNI portion subscribed 40.34 times and retail portion 6.77 times. The issue opened at Rs 85, made a high of Rs 109.40 and closed at Rs 100.65, a gain of Rs 48.65 or 93.55%.

Is it possible for IRCTC to better the debut day performance of Power Grid? It needs to close at around Rs 620 or better. Is it possible or impossible? As mentioned earlier the premium being mentioned of around Rs 240 indicates that the price is up to Rs 560 or a gain of 75%. Anyone willing to buy a share at this price would have a higher target for selling the same. I believe history is in the making today and IRCTC would do so as becoming the best listing share on debut in the PSU stable.

The presence of the Railway Minister at the listing ceremony would add to the weight of the performance of IRCTC. This debut will have a rub off effect on the other listed PSU railway stocks and help PSU stocks in general as well. PSU stocks have the fundamentals and have been performing well but the perception needs to change. IRCTC has the potential to do so it appears.

FPI’s have certainly slowed down the quantum of sales that they had been pressing at the bourses if last week is to be taken as any indicator. While this cannot be taken as a trend, in case it is true than the markets have turned for sure. The mood however continues to be bearish on Dalal Street and traders continue to be trigger happy, more than willing to short to make a quick buck. Fortunately, the BFSI sector has been providing plenty of such opportunities in recent times. It began with DHFL, then Yes Bank, India Bulls Group companies and then HDIL. This is not to mention many other companies which have been hammered by the market. The interesting thing to be noted is that the various departments of the government machinery have become efficient in dealing with fraud cases after the likes of Mallya and Modi-Choksi. In the case of HDIL, they were able to attach innumerable properties, aircraft and luxury cars and jewellery within days of the bank fraud of PMC Bank breaking.

US and China trade wars saw some positive signs of thawing out with US suspending a tariff hike on 350 billion dollars of Chinese imports and China agreeing to buy 40-50 billion dollars of US farm produce. While this is the first piece of good news in many months on this front this is certainly not the end of the issue. There are many more milestones to be achieved but at least there is some sanity. Global markets would cheer this news in the coming week.

An Iranian oil tanker was attacked by missiles purportedly fired by Saudi Arabia. There is no confirmation on this front but it led to crude prices rising by 2%. Turkey continues its war with Syria. While these are geo political risks currently on, the US China deal could dominate markets in the week ahead.

The week ahead should continue to trade with volatility but a positive bias. The listing of IRCTC shares on Monday would have a rub off effect on railway stocks for sure, but would have a positive impact on the PSU pack in general as well. There would be sharp two-sided movements but one should use dips to add long positions.