Markets began with a very strong showing on Monday and that about summed up the week. They were flat for the next two days, gaining on one and losing on the other. The remaining two days saw markets lose and then gain. At the end of the week, while sentiment remained positive, markets were a little confused which way they wanted to go. At the end of the week, BSESENSEX gained 540.90 points or 0.84% to close at 64,904.68 points while NIFTY gained 194.75 points or 1.01% to close at 19,425.35 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.11%, 1.36% and 1.45% respectively. BSEMIDCAP gained 2.62% while BSESMALLCAP was up 2.10%. Suffice to say that all the gains in BSESENSEX were made on Monday while NIFTY gained a tad more on Friday. 

The Indian Rupee lost 6 paisa or 0.07% to close at Rs 83.34 to the US Dollar. Dow Jones gained on three of the five sessions and lost on two. It was up 221.78 points or 0.65% to close at 34,283.10 points. 

It was an action-packed week in the primary markets where we saw three listings and two issues open and close for subscription. The first share to list was Cello World Limited on Monday the 6th of November. Cello had issued shares at Rs 648. Shares had a strong debut at Rs 831, but profit booking saw the share close at Rs 791.90 on listing day. Shares gained Rs 143.90 or 22.20%. They traded sideways for the remaining part of the week and closed at Rs 788.40, a gain of Rs 140.40 or 21.67%. 

The second share to list was Honasa Consumer Limited which had issued shares at Rs 324. Shares listed at Rs 324 on Tuesday the 7th of November and closed day one at Rs 337.15, a gain of Rs 13.15 or 4.05%. By the end of the week, the share lost ground and closed at Rs 319.50, a loss of Rs 4.50 or 1.39%. 

The third share to list was ESAF Small Finance Bank Limited which had issued shares at Rs 60. The share listed on the bourses on Friday the 10th of November at Rs 71.90, a gain of Rs 11.90 or 19.83%. Profit taking saw the share close day one at Rs 69.05, a gain of Rs 9.05 or 15.08%. 

The first issue to open and close for subscription was Protean E-gov Technologies Limited. The issue had a price band of Rs 752-792 and was overall subscribed 15.96 times. The QIB portion was subscribed 33.81 times, HNI portion was subscribed 18.56 times and the Retail portion was subscribed 5.78 times. There were 5.67 lac applications in all. 

The second issue to open and close for subscription during the week was ASK Automotive Limited which had tapped the markets with its offer for sale in a price band of Rs 268-282. The issue was overall subscribed 51.14 times overall with QIB portion subscribed 142.41 times, HNI portion subscribed 35.47 times and Retail portion subscribed 5.70 times. There were 11.52 lac applications in all. 

With listings now happening in three days’ time, the entire cycle has reduced significantly. The above two issues would be listed on Monday and Wednesday respectively. 

Samvat 2080 would begin with ‘Muhurat’ trading being held on Sunday the 12th of November 23 between 6pm and 7.15 pm. Let us look at the broad performance of key indices during Samvat 2079 which began on 26th October 22 and ended on 10th November 23. BSESENSEX gained 5,360.72 points or 9.00% to close at 64,904.68 points. NIFTY gained 1,769 points or 10.01% to close at 19,425.35 points. BANK NIFTY gained 2,697.35 points or 6.56% to close at 43,820.10 points. BSEMIDCAP gained a massive 7,525.27 points or 30.05% to close at 32,566.13 points while BSESMALLCAP was the leader. It gained 9,630.82 points or 33.50% to close at 38,378.76 points. This outperformance by Midcap and Smallcap stocks has added to the glamour and buoyancy on Dalal Street as small investors who typically invest in these stocks have made big money. 

The week ahead has a trading holiday on Tuesday which would cause some sort of break of momentum in the markets at least temporarily. The fact that we have seen the level of 19,330-19,360 on NIFTY comfortably through last week’s trading adds a lot of comfort to the upward movement and momentum. The targets or resistance would now shift upwards to levels of around 19,650 on NIFTY and 65,600 on BSESENSEX. On the support side, levels of 19,200 on NIFTY and 64,225 on BSESENSEX would act as strong support. 

In terms of events, the results of five states elections to be declared on 3rd December would have at best a knee jerk action or reaction on the markets. Not much should be read into these elections results. The mood is optimistic currently and the street believes that post Diwali, markets will continue their upward trajectory. 

Let us welcome Samvat 2080 with great fanfare. 

Trade cautiously

Markets were choppy and volatile in the week gone by. They did recover from the previous week’s lows ands staged some sort of a rally, but are yet to get out of the woods completely. The super sharp rally in the US was not enough to change the sentiment completely in our markets. BSESESENSEX gained 580.98 points or 0.91% to close at 64,363.78 points while NIFTY gained 183.35 points or 0.96% to close at 19,230.60 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.27%, 1.33% and 1.39% respectively. BSEMIDCAP was up 2.00% while BSESMALLCAP was up 1.90%. Markets gained on three of the five sessions and lost on two. 

The Indian Rupee lost 4 paisa or 0.05% to close at Rs 83.28 to the US Dollar. Dow Jones had a stellar week and gained on all five sessions of the week. Dow Jones gained 1,643.73 points or 5.07% to close at 34,061.32 points. The Fed in its meeting during the last week decided to keep interest rates unchanged. The possibility of there being another rate hike during the remaining part of the calendar year still remains, and could yet happen. 

On the Israel-Hamas conflict, Israeli forces are encircling Gaza and the conflict is showing no signs of abating or slowing down. Hostages have not been released and therefore the possibility of a slowdown in the war is virtually ruled out. The world is watching very carefully the situation and one hopes the escalation does not become a widespread event encompassing neighbouring countries as well. 

The primary markets saw a lot of action in the week gone by. We saw two issues open for subscription and close while yet another has opened for subscription. There was also one issue which listed during the week gone by. In the week ahead we have two issues opening for subscription. One other issue has opened for subscription and would be closing in the coming week. Two issues which had closed in the previous week would be listing as well. 

The first issue to open and close was from Cello World Limited. The issue was subscribed 38.90 times overall with QIB portion subscribed 108.57 times, HNI portion subscribed 24.42 times and Retail subscribed 3.06 times. This is the most subscribed issue on the main board in recent times and has created new records of subscription and amount garnered. The issue was for Rs 1,900 crs.. 

The second issue to open and close for subscription was Honasa Consumer Limited which was subscribed 7.61 times overall with QIB portion subscribed 11.50 times, HNI portion subscribed 4.02 times, and Retail portion subscribed 1.34 times. There were 1.19 lac forms in all. 

The issue from Blue Jet Healthcare Limited listed on Wednesday the 1st of November. The company had allotted shares at Rs 346. The share debuted at Rs 359.80 on BSE on the opening day and closed at Rs 395.45, a gain of Rs 49.45 or 14.29%. At the end of the week, the share lost some ground and closed at Rs 390.70, a gain of Rs 44.70 or 12.92%. 

The issue from ESAF Small Finance Bank Limited which is tapping the capital markets with its fresh issue of Rs 390.70 crs and an offer for sale of 72.30 crs in a price band of Rs 57-60. The issue has opened on Friday the 3rd of November and would close on Tuesday the 7th of November. 

The company as the name suggests is a small finance bank and reported an EPS of Rs 6.71 on a fully diluted basis for the year ended March 23. The PE band for the share is 8.49-8.94. The share is reasonably valued and offers scope for appreciation in the short to medium term as well. The issue is over subscribed 1.95 times on the very first day itself. 

The second issue is from Protean EGOV Technologies Limited, who is the pioneer and market leader in universal, citizen-centric and population scale e-governance solutions. It has 25 years’ experience in creating digital public infrastructure. The company is tapping the capital markets with its offer for sale of 61.91 lac shares in a price band of Rs 752-792. The issue would open on Monday the 6th of November and closes on Wednesday the 8th of November. The company had earned an EPS of Rs 26.48 on a fully diluted basis for the year ended March 23. The PE ratio for the issue is 28.40-29.91. One of the selling shareholders is IIFL Special Opportunities Fund who had invested at a price of Rs 950.10 some 6-7 years ago. The fact that this fund has not made money and is partly exiting the company at this price making a loss is comforting for investors, as it gives the signal that the company has been revalued based on its present business and performance. Looking at the pace of digitisation in India and the widespread use of the same, there is scope for appreciation. 

The third company to tap the markets is ASK Automotive Limited which is tapping the markets with its offer for sale of 295.71 lac shares in a price band of Rs 268-282. The issue opens on Tuesday the 7th of November and closes on Thursday the 9th of November. 

The company is into the business of making auto components which consist of advanced braking systems and aluminium die casting engineered products for 2 and three wheelers, passenger and commercial vehicles and non-automotive sector. The company reported revenues of Rs 2,555.16 crs for the year ended March 23 and a profit after tax of Rs 122.95 crs. The company’s performance is comparable with its peers like Endurance Technologies, Uno Minda, Suprajit Engineering and Bharat Forge Limited. The EPS on a fully diluted basis for March 23 was Rs 6.18. The PE band at these earnings is 43.37-45.63. The company is expanding its facilities as capacity utilisation is quite high even though this issue is entirely an offer for sale. Investment in the company is warranted for the medium to long term. 

Shares of Cello World Limited would list on Monday the 6th of November while those of Honasa Consumer Limited would list on Tuesday the 7th of November. While Cello World is expected to deliver strong gains and have a good listing, the market is divided on how Honasa would fare. 

Coming to the markets in the week ahead, expect volatile and two-sided sharp movements. While the strong showing of Dow Jones which registered over 5% gains in the previous week would hopefully have some bearing, it has not done so. The high that NIFTY has made in the present up move is 19,276 points. For the uptrend to become meaningful and sharp, we need to cross the previous low of 19,333 points made a month ago and sustain that. The situation in the Israel-Hamas conflict is just not conducive at the moment to see such an event happening. It therefore makes sense to take things one step at a time. At current levels the markets have support at levels of 18,900-18,950 and they have some resistance at 19,333. If the above level is violated and sustained, we could see levels of 19,600-19,650 as well. 

The week ahead sees ‘Muhurat’ trading for Vikram Samvat year 2080 taking place on Sunday the 12th of November. Markets would have a special session between 6pm and 7.15 pm on Sunday. 

Wishing all my readers a Happy Diwali and a prosperous Samvat 2080. 

Trade cautiously and profitably.