Shares of Mahindra Logistics Limited listed on the bourses and ‘managed’ to stay above par on listing day. The company had tapped the capital markets with its fresh issue for 1,93,32,346 equity shares completed allocation to anchor investors.
The issue is in a price band of Rs 425-429. The company had earlier allotted 57,62,203 shares to 15 anchor investors comprising of 19 entities. The highest allocation of 5,36,112 shares or 9.30% has been made to four investors which include 2 FPI’s and 2 domestic funds.

The issue was subscribed overall 7.90 times with QIB portion subscribed 15.60 times. The HNI portion was subscribed 2.02 times while retail was subscribed 6.10 times. In terms of number of applications, the company received 10.04 lakh applications and the retail portion was subscribed 5.08 times in terms of lots.

The discovered price was Rs 432 on the BSE and Rs 429 on the NSE. The high of the day was Rs 433.95 on the BSE and Rs 433.85 on the NSE. The low as Rs 416.55 and Rs 416.10 respectively. The closing price was Rs 429.15 on the BSE, a gain of 15 paisa or 0.03%, while it was Rs 429.50, a gain of 50 paisa or 0.12% on the NSE.

The traded volume was 117.13 lakh shares on the two exchanges combined. This was 60.59% of the IPO size of 193.32 lakh shares. Adjusting the same for non-anchor the traded volume was 86.32% of the IPO size. Delivery volume was 46.13 lakh shares which was 39.395 of the traded volume and 23.87% of the IPO size.

The weighted average of the days trade was Rs 427.46 on the BSE and Rs 426.81 on the NSE. With no funding there was no undue pressure on the share but the share did not return any profits for investors.

The last issue to list from the Mahindra stable was Mahindra Holidays way back in July 2009. Those shares were issued at Rs 300 and rose a little under 6% on listing day. Since the issue till date the company issued bonus shares in the current year in July 2017 in the ratio of one share for 2 shares held. The current price of Rs 342.50 means that the original share has appreciated from Rs 300 to Rs 513.75 in a little over eight years. I believe the returns are substandard and well below the returns of even the SENSEX which has almost doubled in the same period.

Poor listing and just about made the grade of not finishing below the issue price on listing day.

The offer for sale from HDFC Standard Life Insurance Company Limited was subscribed 4.90 times. The company had tapped the capital markets with its offer for sale of 29,98,27,818 equity shares in a price band of Rs 275-290. It had earlier allotted 8,00,68,600 equity shares to 89 anchor investors comprising of 126 entities.

The public issue which was subscribed 4.90 times was on the back of excellent institutional support. QIB’s 16.60 times. HNI portion was subscribed 2.28 times and Retail portion was subscribed 0.94 times. There were 11.54 lakh applications in all.

The reservation for shareholders saw a poor response and was subscribed a mere 0.30 times. The reservation for employees was oversubscribed 1.24 times. In all the issue response was very clearly backed by institutions who have been with the company and the brand HDFC. Readers would rec all that the holding of institutions in both HDFC and HDFC Bank is largely institutional and that strength has seen this issue through.

Details of the subscription are given below: –

The week gone by saw losses on two of the five trading days. Markets ended with weekly losses with the BSESENSEX losing 1.11% and NIFTY down 1.27%. Even on the two days that markets ended n the red they began with gains and then surrendered them and went into the negative, call it profit booking or resistance, it is difficult to coin the exact word.

In primary market news there were two listings during the week. Reliance Nippon Life listed with gains of over 12%, yet leveraged investors lost money. The second listing was from Mahindra Logistics which had to be managed to cloe above the issue price of Rs 429, It closed at Rs 429.15 on the BSE, a gain of a mere 0.03%. The close on the NSE was a little higher at Rs 429.50. The significance of the higher than issue price close on listing day is for merchant bankers whose track record gets impacted.

Two issues were open for subscription as well. The first was Khadim which was just about subscribed at 1.90 times. The QIB portion was subscribed 2.44 times and Retail 2.33 times while HNI was undersubscribed 0.18 times. The second issue open for subscription was the mega issue from HDFC Standard Life Insurance which was subscribed 4.90 times and received excellent institutional support. The QIB portion was subscribed 16.60 times while HNI was subscribed 2.29 times. Retail and shareholder quota remained undersubscribed. The issue which was to raise Rs 8,695 crs garnered interest of Rs 33,570 crs. Clearly the name HDFC did the trick and the fact that investors in the two listed entities HDFC and HDFC Bank have made huge returns in these two stocks.

The highest fund raising was in the year 2007 when about Rs 35,000 crs were raised from the primary market. This year so far about Rs 65,000 crs have been raised and of this about Rs 45,000 is by the insurance companies. Till last year the insurance sector was a sunrise sector and people were waiting for their issues to come. With this flood of issues not only is the appetite killed there seems to be negativity about the valuations. Currently three of the five issues are listed and two of them are trading at a discount. The third is trading at a premium of 3%. A fourth would list today and the last of the lot towards the end of the week. It can be said that the timing of these issues could have been better and more spaced out rather than the bunch in which they came. Probably the promoters and the merchant bankers may be aware of developments which we the general public are not known to.

Markets are in no man’s land and unsure which way they want to go. Why the upward trend is intact it seems to be running out of momentum as the results do not back the valuations. It makes sense tyo stay light and play by the ear on a daily basis.