Shares of Lemon Tree Hotels Limited had amore than a dream debut and gained over 27%. The company had tapped the capital markets with its offer for sale of 18,54,79,400 shares in a price band of Rs 54-56. The company had allotted 5,56,43,820 equity shares to 18 anchor investors comprising of 20 entities. The highest allocation was made to SBI Mutual Fund of 1,15,84,740 equity shares which corresponds to 20.90% of the anchor allocation.

The public issue did not receive adequate response from HNI’s and Retail investors but was oversubscribed by QIB’s. The QIB portion was subscribed 3.89 times while HNI and Retail was a mere 12% each. The overall subscription was 1.89 times. Very clearly Retail and HNI comprising of half the issue were not enthused by the same.

The discovered price was Rs 61.60 on both the exchanges which was a good 10% higher. The low of the day was Rs 57.30 on the BSE and Rs 57.25 on the NSE. The high was the upper circuit of Rs 73.90 on both the exchanges. The close was Rs 71.60, a gain of Rs 15.60 or 27.86% on the BSE. On the NSE the close was Rs 71.65, a gain of Rs 15.65 or 27.95%.

The traded volume was 764.20 lakh shares which was 41.20% of the IPO size of 1854.79 lakh shares. The delivery volume was 146.70 lakh shares which was 19.20% of the traded volume and 7.91% of the IPO size. The delivery as a percentage of non-anchor portion was 11.30%. One would have thought with lack of participation from HNI and Retail, the traded volume would not be so high. The weighted average of the day was Rs 66.59 on the BSE and Rs 65.58 on the NSE.
There were two institutional trades reported on the day. The first was a buy of 51.54 lakh shares by Mirae Asset at Rs 65.61. the second was a sell trade by DB International which sold 44.62 lakh shares at Rs 62.07.

While there was a lot of short covering during the day which helped the share gain ground, it still remains an expensive share and the massive rally makes it that much more expensive. While listing day has been a success for the company its performance going forward would be watched carefully.

It was a roller coaster ride on the bourses and more so in the USA. Trade wars or at least the posturing on it has shaken and stirred the markets. The BSESENSEX gained 658.29 points or 1.96% to close at 33,626.97 points. NIFTY gained 217.90 points or 2.11% to close at 10,331.60 points. Dow Jones lost 170.36 points or 0.71% to close at 23,932.75 points. At this point of time the benchmark indices, SENSEX and NIFTY are lower by a little over 8% from the highs of 29th January 2018 while Dow Jones is down by over 11% from the same day. Incidentally all three indices are trading in negative for the year to date period.

RBI on expected lines did not change key interest rates in its policy meet last week. The action was well received by markets and they rallied thereafter. The stance was dovish in nature and that saw the markets rallying strongly.

ICICI Bank is in the thick of controversy with its CEO Chanda Kochhar and the links with some of the bank’s customers and her husband’s ventures. What is indeed surprising is the haste with which the board cleared her from any wrong doing. With the matter under the scanner, it would have been appropriate for the bank to assign an outside agency to look into the matter before giving any clear statement. With this statement they have not only absolved her but also made themselves liable for any wrong doings which surface later. One should also bear in mind that there is no action on the whistle-blowers complaint till date. On the other hand, her brother in law has been questioned over the last few days and advised to remain in the country. This matter is not getting over very soon.

There were four new issues which listed last week. They had by and large a negative listing with three of them losing ground on listing day and one remaining unchanged. The first to list was Sandhar Technologies Limited which had issued shares at Rs 332. The share debuted with gains but selling pressure saw the share close with losses at Rs 322, down 2.85%. Weekly close however saw the share gain and was up 2.80%.

Shares of Karda Construction Limited listed with losses of 20% on day one. The comfort with this company is just not there. Being in trade to trade category the fact that share price is hitting upper circuit, gives rise to suspicion on whether the whole issue is “managed”. The company had issued shares at Rs 180. They recovered some of the losses and closed for the week at Rs 165.2 down 8.19%.

The third share was ICICI Securities which issued shares at Rs 520 and had a disastrous debut losing Rs 75 or 14.4%. The loss during the week increased marginally and the share closed at Rs 440.60, a loss of 15.27%. This is yet another example of over pricing. It may be mentioned that incidents with the bank and its CEO have nothing to do with the poor listing.

The final share to list was Mishra Dhatu Nigam Limited which had issued shares at Rs 90 and remained unchanged. At the end of the week the same was at Rs 90.25, a gain of 0.28%.

In the week ahead shares of Lemon Tree Hotels Limited would list on the bourses. The response from non-institutional investors was poor and the issue in both HNI and Retail categories remained undersubscribed. QIB’s who had subscribed to the issue need to turn buyers on day one otherwise the share could suffer losses.

Trade wars hurt all concerned and more so the two countries who seem to be posturing. The biggest investor in the United States in their treasury is China. Similarly, US imports almost everything needed by a common citizen in their daily needs from China. They export higher value products. The biggest sufferer in a stand-off would be the common citizens of USA and that would have a big impact on the country. Posturing may have a short-term benefit but in the longer term and in reality, it is extremely negative for all and sundry.

Markets seem to be on the recovery path and would be waiting for quarterly results for confirmation of the same. The fact that the primary market has now taken a back seat is also a comfort as liquidity would not be under pressure.

The action in the coming week would be in the banking sector where developments in the ICICI Bank would act as triggers. With focus shifting from PSU banks to private banks, there is likely to be some recovery in prices in the psu bank space as well. Use any weakness to build a portfolio.