Varun Beverages Limited which is tapping the capital markets with its simultaneous offer for sale of 1 cr shares and fresh issue of 1.5 cr shares completed allocation to anchor investors. The price band is Rs 440-445. The issue opens on Wednesday the 26th of October and closes on Friday the 28th of October. There are a total of 14 anchor investors comprising of 18 entities and they were allotted 73.50 lakh shares. What is a little odd is that the anchor allotment was upto 30% of the QIB which would have been 75 lakh shares, but allotment is for 73.5 lakh shares. What is however surprising is that mutual funds who are flush with funds have not taken to the issue and there is just one Indian mutual fund who has applied in five schemes. Sundaram Mutual Fund has been allotted 7,86,489 shares or 10.70% of the anchor book.
Quite surprising when mutual funds are flush with funds and are looking for stock ideas and the India growth story is being talked about why this reluctance to apply for this issue. In contrast the anchor allocation a day ago was of a different kind with there being 45 anchor investors and 71 entities. In the case of Varun Beverages the highest allotment has been made to Stichting Depository with 13.02% allocation followed by jointly of 12% each to Abu Dhabi Investment Authority and Nordea. Clearly there is domination in allotment and the company had little choice with the issue not being oversubscribed.

The full list of anchor investors and their allotment is given below: –

PNB Housing Finance Limited which is tapping the capital markets with its fresh issue to raise Rs 3,000 crs completed allocation to anchor investors. The price band is Rs 750-775. The company allotted 1,15,37,902 shares at the top end of the band of Rs 775 to 45 anchor investors comprising of 71 entities. The highest allocation has been made to Govt of Singapore who has been allotted 6,22,687 shares which is 5.40% of the anchor book. The number of anchors and the highest allocation gives an idea of the demand of the issue.

The issue opens today i.e. Tuesday the 25th of October and closes on Thursday the 27th of October 2016. There is demand for the issue and it would be oversubscribed many times over.

The complete list of anchor allotment is given below: –

Bears were at the receiving end on Tuesday when we had a huge rally and forced bears to cover their shorts. The net outcome was a massive 521 points gain on that day. The remaining days of trading saw some of these gains being surrendered for the week to end at 28,077.18 points, a gain of 403.58 points or 1.46%. NIFTY was up 109.65 points or 1.28% at 8,693.05 points. Action in the midcap and smallcap space continues unabated and is ahead of the benchmark indices.

Shares of Endurance Technologies Limited listed on Wednesday and had a stellar debut gaining 37% of day one. The shares which were issued at Rs 472 closed at Rs 623.40, a gain of Rs 151.40 or 32.08%.

The government sold 9 cr shares of NBCC at the floor price of Rs 246.50 on Thursday and Friday. This way they have been able to raise Rs 2,200 crs and inch up to their divestment target.

The week ahead sees expiry of October series futures. The series is up with gains of the last week as the same was flat prior to it. With just about 1% up, things could go either way and I believe that there is a downward bias with result season not throwing up to many pleasant surprises.

There are two IPO’s opening this week. The first is from PNB Housing Finance Limited looking to raise Rs 3,000 crs in a price band of Rs 750-775. The issue opens on Tuesday the 25th of October and closes on Thursday the 27th of October. The second issue is from Varun Beverages where there is a simultaneous offer for sale of 1 cr shares and fresh issue of 1.5 cr shares. The price band is Rs 440-445. The issue opens on Wednesday the 26th of October and closes on Friday the 28th of October.

Markets are looking under pressure and the momentum has broken. Stay cautious and use rallies to reduce exposure.