It is said that markets have a mind of their own and this was amply demonstrated twice in the last four weeks. The whole world believed that Donald Trump winning the presidential polls would cause US markets to fall. He won the elections and Dow Jones has gained a whopping 9.48% from the lows of 4th November and 7.57% from Election Day.

Closer home our markets had discounted a rate cut from RBI on Wednesday the 7th of November. When the same did not happen we had a sharp intraday correction which saw the BSESENSEX lose 376 points from high to low. The next day markets gained 458 points on a closing basis. What had changed between Wednesday’s disappointments on their being no rate cut to optimism on Thursday? Beats me.

Sheela Foam had a great listing closing at upper circuit with gains of 41.37% on day one. SBIMF was a big buyer and bought over 15% of the IPO size. SBIMF was also an anchor investor in the company.

There is a very grave area which needs the regulator’s urgent attention on a war footing. The new breed of investor relations firm have started a differential pricing model which is linked to the market capitalisation of the stock price. This without public information and disclosure is nothing short of market manipulation and should raise a lot of eyebrows. The difference between what this firm does and a so called ‘market operator or manipulator’ does is a fine line. The regulator needs to look into this issue and flag the agencies and companies indulging in such contracts.

The real threat in such a contract is the fear that to maximise returns, information which is privy may be shared selectively and price manipulated. Also when the cut-off date approaches the price could be moved to ensure higher payoff. What is even worse is the fact that the agency with the promoter or on their own may give information to select market intermediaries which is factually incorrect.

This growing trend needs to be nipped in the bud at the earliest before collateral damage takes place.

Yet another company has seen its revenues and disclosure challenged. This time it is Manpasand Beverages the maker of Mango juice. While serious allegations have been made, the company has so far chosen to remain silent and there is no information to the bourses. There should be a clear statement by the company on this issue informing the status to investors

Shares of Sheela Foam Limited listed on the bourses on Friday the 9th of December and were off to a flyer. The shares hit the upper circuit in about 35 minutes of trade and continued at the same level when trading ended. The shares which were issued at Rs 730 closed at Rs1032, a gain of Rs 302 or 41.37%.

The company had sold shares worth Rs 510 crs through an offer for sale in a price band of Rs 680-730. It had earlier allotted 20.95 lakh shares to 14 anchor investors comprising of 27 entities. The issue was oversubscribed 5.09 times with QIB portion subscribed 14.51 times, HNI’s 3.35 times and retail 0.44 times. The timing of the issue coming as it did after the demonetisation move affected subscription. The grey market which is normally very active was hardly there and therefore affected subscription from HNI’s who did not get leveraged funds for application. Retail on the lack of grey market activity did not subscribe in large numbers as they sell their application in the grey market.

Not sure whether the circumstances were to the advantage of the company or not. Probably the comparatively lower subscription and no leverage of HNI’s helped in better price discovery and ensured a better listing as there was no selling pressure.

The share opened at Rs 860, a gain of Rs 130 on both the exchanges and in about 30 minutes of trade hit the upper circuit. Having hit the upper circuit it remained there throughout the day. The only trade reported under bulk category was that of three schemes of State Bank of India which together bought 10,65,958 shares at an average of 979.73 per share. This amounts to 15.25% of the IPO size. Earlier the company had bought 1.93 lac shares as anchor investor through seven schemes. This amounted to 9.22% of the anchor book.

Combined volume on the two exchanges was 57.05 lac shares which was 0.82 times the IPO size and 1.17 times if one considered the non-anchor portion. Delivery volume was 21.06 lac shares which was 36.92% of traded volume and 30.15% of IPO size. Considering non-anchor delivery percentage was 43.07%.

Share had a great debut helped in no small manner by the interest shown by SBIMF in the company. Reluctant investors have made a killing in the share with gains of over 41% at closing price. If one considers even the weighted average price of Rs 970, the in absolute terms is Rs 240 or 32.87%. No one could be complaining at the listing.