Will RBI Cut Rates?

June 1st, 2015 Comments Off on Will RBI Cut Rates?

The May series expired on a quiet note but ended with gains of 137.50 points or 1.68%. It surrendered half the lead that it had in the four days of trading in the last week. Friday was the beginning of a new account and June series which began with a bang. Markets recovered sharply and ended on a positive note.

GDP numbers for the 4th quarter came in post the market and they were at an impressive 7.5% for the quarter. This makes the full year GDP for 2014-2015 at 7.3%. Impressive yet needs improvement and agriculture and industry are the two areas which this can happen.

RBI meets on Tuesday the 2nd of June for its monetary review and with inflation softening and GDP on the road to progress, it is more than certain that rates will be cut this time. The expectation is that there would be cuts in CRR so that rates soften and because there is no issue of liquidity allow banks to borrow and lend to RBI also cheaper. Therefore cut in repo and reverse repo is also expected. The silver lining to the policy could be if SLR is reduced which will actually free money into the banking system.

The mood going into June ism optimistic and buoyant and if RR delivers as the street wants, we could see a sharp rally in the coming days. Ride the rally as it unfolds.

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Performance of Newly Listed Shares as on 29th May 2015

June 1st, 2015 Comments Off on Performance of Newly Listed Shares as on 29th May 2015
Name Date of listing Issue Price closing price closing price % gain loss change over
29th May 22nd May over week lssue price
Otel Communications Limited 19th March 181.00 174.50 169.70 2.56 -3.59
Adlabs Entertainment Limited 6th April 180.00 150.60 171.50 -11.61 -16.33
Inox Wind Energy Limited 9th April 325.00 436.20 438.90 -0.83 34.22
VRL Logistics Limited 30th April 205.00 308.80 289.90 9.22 50.63
MEP Infrastructure Limited 6th April 63.00 58.60 57.70 1.43 -6.98
UFO Moviez Limited 14th May 625.00 587.30 600.15 -2.06 -6.03
PNC Infratech Limited 26th May 378.00 400.05 N.A -1.85 5.83

 

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PNC Inftratech Limited – Listing day shares ends with losses of 4.6%

May 27th, 2015 Comments Off on PNC Inftratech Limited – Listing day shares ends with losses of 4.6%

Shares of PFC Infratech Limited listed on the bourses on Tuesday the 26th of May. The debut day was not too good for the company or for those shareholders who decided to apply for shares and wanted an exit on day one. The discovered price was Rs 381 a premium of Rs 3 to the issue price of Rs 378. The price band was Rs 355-378 and the issue was priced at the top end of the band. The issue was oversubscribed on the basis of response from QIB’s while retail and HNI portion remained undersubscribed.

The share after the discovered price drifted down to about Rs 368 which was a discount of Rs 10 to the issue price by about 1.45 pm. Thereafter there was some mini panic in the share and the low of the day of Rs 346.30 was touched. The share recovered from these lows to close at a much more respectable Rs 360.20 on the BSE and Rs 360.50 on the NSE. Net loss for the day was Rs 17.80 or 4.71% on the BSE and RS 17.50 or 4.63% on the NSE.





Untitled Document

Exchange  Open  High Low Close Net Change % Gain/loss Wt. Avg Volume Delivery  Del %age
BSE 381.00 387.80 346.30 360.20 -17.80 -4.71 371.44 1011752 306581 30.30
NSE 387.00 387.00 346.40 360.50 -17.50 -4.63 374.87 3467507 1299864 37.49
Total 4479259 1606445 35.86


Delivery volume for the day was 16.06 lac shares on a traded volume of 44.79 lac shares which corresponds to a very healthy 35.86%. What one interprets from this is a that people who were trading were more interested in delivery based and seeing the share drift were on the sell and then buy mode rather than buy and then sell mode. As a percentage of the issue size of 129.21 lacs the delivery percentage was 12.43%. Considering that the same is not very high and allotment to retail and HNI’s who are supposed to be the weak link in an issue was a total of 23.82 lac shares, it appears that the price fall and delivery has been pressed by institutional investors.

PNC Infratech is the 7th IPO to list in the last two months and is the 5th which is trading below par. Just two IPO’s namely Inox Wind and VRL Logistics are trading above issue price and they are at a hefty premium to issue price with gains of over 35% each. The pricing of issues continues to be a contentious issue and it appears merchant bankers are unwilling to bite the bullet as far as fair pricing is concerned.

In conclusion one more IPO makes its debut and trades at a discount at end of day trading. With a mere 12% of issue size delivered future course the share price will take depends on who blinks; the seller or a prospective buyer.

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