Markets continued to be volatile and choppy. While at the end of the week they notched up gains of about 1%, all of it came on Friday, the last trading day of the week. Global markets too gained with Dow Jones up 2.26% at 17,602.38. The first part of the budget session ended with high drama on the last day over Aadhar bill. The Rajya Sabha recommended five amendments in the bill which were promptly rejected and passed by Lok Sabha without accepting any of the amendments. This has led to growing differences between the ruling BJP and opposition Congress. One should be sure that there would be greater drama when the session begins again in April.
The primary market is seeing action all over again with one issue subscribed on Friday, one opened on Friday and closing on Tuesday and yet another opening on Monday. The issue from HCG was subscribed 1.56 times with the HNI portion subscribed a mere 0.43 times and retail 0.83 times. The issue from Bharat Wire Ropes has opened on Friday to raise Rs 70 crs in a price band of Rs 40-45. The funds are being raised for setting up a new integrated wires and wire rope manufacturing facility in Chaalisgaon, Maharashtra. A state of the art facility with an installed capacity of 66,000 tons and at a capital outlay of approx. Rs 500 crs is expected to be commissioned by the year end December 2016.
The third issue is from e-tailer Infibeam Incorporation Limited who is raising Rs 450 crs in a price band of Rs362-432. The objects of the issue are to buy software, set up 75 logistics centres and invest in setting up the corporate headquarters. The fate of India’s first e-commerce company going public would be keenly watched by many aspirants in this space. The fact that the company has made profits only in this financial year is a drag on the company’s fortunes. There is also a media created story where 2 of the four merchant bankers at the time of the filing of the DRHP do not figure in the RHP. For reasons best known to the two merchant bankers and the promoters, these two chose not to be a part of the final issue. There should be no controversy about it and trying to read between the lines is simply not fair or correct. This is not the first time that such a thing has happened.
It’s raining dividends on Dalal Street and no one is complaining. Good things last for some time and dividends given in March 2016 are unlikely to be repeated anytime soon. There is an unique situation where PSU companies which had declared interim dividends in February 2016 are declaring a second interim dividend in March to beat the tax man who comes knocking from 1st April.
SEBI is hell bent on killing all avenues of business for financial advisors. By asking all mutual funds to state the commission that is being paid for investment into a scheme they are likely to open up confrontation between the advisor and the client. One does appreciate that commissions need to be brought down but the manner in which SEBI has chosen to do so seems inappropriate. Earlier the SEBI chief had mentioned that he has no problem if retail investors do not come to the capital market (primary or secondary) and do so through the mutual fund route. This new step to hit the MF industry is a calculated step to kill small investors and advisors and make the capital market a place only for the really large. One hopes that the regulator remembers the mandate of SEBI protecting the small investor.
On that hopeful note here’s wishing all a happy holi on Thursday.
