History repeats itself
The IPO from NCML Industries Limited was withdrawn after being extended citing poor response from investors. The timing of the issue seems to be jinxed where exactly three years ago another IPO from Goodwill Hospital & Research Centre Limited was withdrawn. The issue from NCML was open from 29th December 2014 to 2nd January 2015 and the price band was Rs 100 to 120. The issue size was 60 lac shares and the issue was an offer for sale. Further the bucket size was a little odd with 10% for QIB’s, 27% for HNI’s and 63% for retail investors. The issue was extended to close on Friday the 9th of January and the issue price band was revised downwards to Rs 80-90.
The issue from Goodwill was to raise Rs62 crs in a p-rice band of Rs 175 to Rs 185. The issue was open from 30th December 2011 to 9th January 2012.The size of this issue and the dates that the issue was eventually open are similar in amount and virtually same for the dates. The similarity is striking and distinctly noticeable.
The issue from NCML was subscribed in the second attempt after extension of time in 2 out of 3 buckets namely QIB and HNI. The difficult part was the retail bucket which was also the largest at 63%. What went wrong?
The industry edible oil extraction is not in flavour and has not produced results in terms of appreciation for investors. KS Oil, Ruchi Soya, GokulRefoil, Raj Oil Mills are some of the names which come to mind where investors have lost money. Secondly for reasons best known to them the promoters and merchant bankers chose not to have any roadshows for the issue. Third fundamentals of the issue were certainly weak and the issue was an offer for sale. Finally as mentioned earlier the period probably seems jinxed.
All in all history repeats itself and yet another issue bites the dust.
NCML Industries Limited – Issue withdrawn
Performance of Newly Listed Shares as on 9th January 2015
| Name | Date of listing | Issue Price | closing price | closing price | % gain loss | change over |
| 9th January | 2nd January | over week | lssue price | |||
| Sharda Cropchem Limited | 23rd September | 156.00 | 255.60 | 269.35 | -8.81 | 63.85 |
| Shemaroo Entertainment Limited | 1st October | 170.00 | 185.70 | 194.20 | -5.00 | 9.24 |
| Monte Carlo Fashion Limited | 19th December | 645.00 | 508.75 | 539.30 | -4.74 | -21.12 |
Markets critically poised and would be volatile
The year 2014 has ended with returns from the stock market being decent from all standards. The benchmark indices saw the BSESENSEX and NIFTY return about 30% while the BSESMALLCAP outperformed gaining 69.24%. The BSEMIDCAP gained 54.69%. The best performing sectoral gainer was BSECONDUR up 66.18% closely followed by BSEBANKEX up 65.04%.
FII’s have bought Rs 98,177.90 crs worth of equity in the calendar year 2014 while domestic institutions were buyers of equity worth Rs 23,558 crs. The government intends to begin divestment in all earnest from the middle of January post Vibrant Gujrat. Currently after the two day bankers conclave held in Pune where RBI governor, FM and PM along with the ministry and all key officials of banks met, three things have emerged as key takeaways. The government needs to dilute its equity and allow banks to be autonomous in taking decisions. Secondly the present level of NPA’s is just too high and they need to be brought down. Thirdly the government has assured banks that there would be no interference in the day to day functioning of banks whatsoever.
Technically the market has given a break out on Friday and should be good for some further upward move. With shorts eliminated on Friday’s upsurge we need news flow to keep the momentum going. Currently volumes were abysmally low on FII’s being on vacation. With them returning on Monday onwards, volumes should improve significantly and help market find their trend and direction.
Tough times for the market with next couple of days being crucial. There could be some selling pressure from quarters who expected announcement from Bankers conclave. In any case markets are well placed and seem to have taken all in their stride. The entire nation is waiting for bated breath to see what PM Modi does at Vibrant Gujrat where the who’s who of the world business community would be attending coming weekend.
Hold your kites and wait for the right wind to release them.
