The offer for sale from HUDCO was oversubscribed 79.53 times. The company had tapped the capital markets with its offer for sale of 20.40 cr shares in a price band of Rs 56-60. Retail and employees were offered a discount of Rs 2 per share. Retail subscription saw a new record with 20.13 lakh applications. This beat the previous best in the issue of Avenue Supermarts the company which runs the D-Mart chain of stores which had received 18.75 lakh subscriptions.

The new applicants are coming from Tier-2 and Tier-3 towns and this trend is also being witnessed in mutual funds where SIP’s have reached a level of 4,200 crs. The other confirmation of this fact is that the total retail subscription was 10.79 times while in terms of applications it was 5.75 times. This number of 10.79 times means that people have applied for more than one lot which would be from first time or nee applicants who are not aware of allotment.

The subscription in the HNI category was 330.36 times and it garnered subscription of almost Rs 60,000 crs. The cost of interest for the leveraged investor assuming 6% interest is Rs 22.78 per share. The share needs to trade above Rs 85 if the HNI is to make even token profit in his application.

This cost of funding would be the comfort factor for the lucky retail investor who gets allotment.

Markets had a poor show on Friday and the weakness pulled the markets into negative territory for the week. Friday saw losses of more than 0.75% and the gains made the previous day were wiped out. The BSESENSEX ended with losses of 59.60 points or 0.20% to close at 29,858.80 points. NIFTY lost 18.75 points or 0.20% to close at 9,285.30 points. Metal and pharma sectors were under pressure.

All the action seems to have shifted to the primary market where we saw the first INVIT issue from IRB open and close for subscription. This week we have the issue from HUDCO and the listing of S Chanda and Company on Tuesday.

The issue from IRB INVIT received excellent response and was oversubscribed 8.57 times. The issue garnered support of Rs 24,000 crs in all and as many as 62,275 applications were received. In terms of minimum lots itself the non-QIB portion is subscribed 5.46 times.

Government of India owned HUDCO is tapping the capital markets with its offer for sale of 20.40 cr shares in a price band of Rs 56-60 to raise Rs 1,142-1,224 crs. There is a discount of Rs 2 for retail shareholders and also eligible employees. Coming from the government and being in the housing space, the issue is expected to garner lot of attention and would be oversubscribed many times over.

The issue from S Chand and Company would list on Tuesday the 9th of March. The issue had received excellent response and was oversubscribed 59.49 times with HNI portion subscribed 204.65 times. This would be the first stock in the education sector which would be making money for investors in recent times. Earlier issues like C L Educate, MT Educate and even Career Point disappointed market participants.

Result season is currently on and there seems to be no clear trend emerging so far. Some results are good and some bad. While the worst is certainly over the extremely rich valuations which the market is currently enjoying needs to correct. The way that can happen is for earnings to improve or share prices to come down. Earning improvement is likely to take another one to three quarters which leaves the other option that prices need to consolidate at current levels.

I believe nothing significant would happen in markets in the near term. While liquidity would ensure that prices do not fall too sharply, any sharp rise would result in profit taking. This would ensure that markets trade in a fairly broad range allowing traders to have a field day.

Enjoy the movement and wait for sharp movements to enter or exit the market.