The week gone by was super volatile and ended just about flat. The BSESENSEX gained 42.03 points or 0.15% to close at 28,152.40 points while NIFTY lost 11 points or 0.13% to close at 8,672.15 points. The monsoon session of Parliament ended with the most productive session in recent times. GST was passed amongst other bills. Monsson has been surplus and in some places God has been more than merciful resulting in floods.

Results season is not over as companies have been given time to adjust to the new reporting formats and more results will follow in the coming weeks as well. Markets were completely mixed and as of Wednesday had become quite weak and but for a pullback on Thursday and Friday would have been negative for the week.

The PSU banks have more or less completed declaring their results and it appears that the worst is more or less over. This does not therefore mean that all is well and they will be back to reporting normal results from the next quarter. What it does mean is that things are better and if the economy revives they will be better off and there would be recoveries in the non-performing assets.

The Kumar Mangalam Birla group announced a merger of its two flagship companies Grasim and AB Nuvo, which was not liked by the markets. The prices of both companies fell quite sharply with Grasim down 13.36% and AB Nuvo down 16.72%. The management did host a concall post the announcement but concerns still remain. Expect more volatility in the coming week and some more clarifications by way of broker reports on the merger. One more observation is that pessimism lasts for not more than 72 hours and news of this merger were officially communicated to the exchanges on Thursday the 11th of August. This means that the shares should begin to consolidate on Tuesday or latest on Wednesday.

In primary market news the issue from Ratnakar Bank Limited would open on Friday the 19th of August and close on Tuesday the 23rd of August. The issue would consist of a fresh issue of Rs 832.5 crs and an offer for sale of 1.69 cr shares in a price band of Rs 224-225. This is the second issue after Equitas Holdings which has a difference in price band of a mere one rupee.

Two issues listed during the week with shares of Dilip Buildcon gaining 11.51%. These shares were issued at Rs 219 and the issue had received excellent response with the issue subscribed 20.95 times with HNI’s subscribing their bucket 79.64 times. The other issue to list was S P Apparels which had issued shares at Rs 268. The share gained 10.07% on day one. The issue was subscribed 2.66 times.

This would be a short four day trading week with Monday already having been a holiday on account of Independence Day. Going forward we have the Parsi New Tear coming up which would be a bank holiday but markets would be trading. In a short four day week markets tend to be more volatile than normal.

With markets trading at new calendar year highs, it appears all news has been discounted. Going forward we need to consolidate at these new heights before moving on or moving down. I believe we need to rebuild at a lower base before we attempt to go higher. Take your call and decide which way markets will move.

Shares of S P Apparels Limited listed on the BSE and NSE on Friday and registered gains of 10% on the BSE and 7.74% on the NSE. The company had issued fresh equity worth Rs 215 crs and an offer for sale of 9 lac shares in a price band of Rs 258-268. The discovered price on the BSE was Rs 305 while on the NSE it was Rs 275. This created a bizarre situation intraday when shares on the NSE were locked down and those on the NSE were almost locked up. The difference in price discovery of almost 10% and a circuit filter of 5% was responsible for the same. Many investors were caught on the wrong foot when they realised a little bit late that trading of these shares was in the trade to trade segment.

The company had allotted 26.76 lac shares to seven anchor investors at Rs 268. The issue was subscribed 2.66 times with QIB’s subscribing 2.21 times, HNI’s 5.10 and retail 1.90 times.

The total traded volume was 26.23 lac shares which was about 29% of the IPO size of 89.24 lac shares. The delivery percentage was 100% as the shares were traded in trade to trade segment. The delivery was 29.40% of the IPO size and 42% excluding the anchor portion. Considering that the overall subscription was a little bit poor the performance on day one has been satisfactory. The share would continue to trade in the trade to trade segment for another nine days and the daily circuit filter would remain at 5%.

The share has performed better than expected so far and it remains to be seen what happens in the remaining nine days. So far so good.

Shares of Dilip Buildcon Limited (DBL) debuted on the BSE and NSE and clocked decent gains of 15%. The company had launched its fresh issue of Rs 430 crs and an offer for sale of 102.27 lac shares in a price band of Rs 214-219. The company had earlier allotted 89,58,592 equity shares to 10 anchor investors comprising of 13 entities at Rs 219. The issue was subscribed 20.95 times with QIB portion subscribed 9.76 times, HNI 76.79 times and retail 2.35 times.

The discovered price was Rs 240 on both the exchanges and brisk trading happened at these levels with 4.70 lacs traded on BSE and 31.72 lacs traded on NSE. The overall trading for the day was 340 lacs on the two exchanges with BSE clocking volumes of 70.58 lacs and NSE 269.35 lacs. The weighted average of the day was Rs 247 and 247.25 respectively which indicates that everybody made money. The closing price was Rs 251.95 and Rs 251.75 respectively a gain of Rs 32.95 and 32.75 or 15%.

The delivery volume was 126.37 lac shares and as a percentage of traded volume was 37.18%. If one considered this as a percentage of IPO size it was 42.32% and if one considered without the anchor portion the same was 60.46%. There was a spurt in prices and sharp rise in traded volume at the end of the day. This was borne out by the fact that two institutional investors bought shares at the end while a third bought during the day. The two that bought at the end were Abu Dhabi Investment authority which bought 15 lac shares at Rs 249.18 and Swiss Finance Corporation which bought 7.30 lac shares at Rs 250.04. The one that bought during the day was East Bridge Capital which bought 11.67 lac shares at Rs 242.17. The total shares bought by these three institutions were 33.97 lac shares which is a healthy number when compared with the total delivery of 126 lac shares.

All in all considering this was an infra company it has delivered on day one.