Markets were on a roll last week and behaved on expected lines. On the very first day of the week, they took a giant leap and crossed Mount 20K on NIFTY. Thereafter the best performing midcap and Smallcap stocks took a sharp correction on Tuesday. The momentum and euphoria in the market continues unabated. The upbeat mood will take some time before it diminishes and then disappears. As of date, India remains that one exception globally where markets are rallying virtually unabated. The benchmark indices gained on all five days of the week while midcap and Smallcap indices gained on four days and lost on one session. However, the fall on Tuesday was severe to see the BSEMIDCAP and BSESMALLCAP end in the negative for the week. The loss on Tuesday in BSEMIDCAP was 1,000 points while it was 1,600 points on BSESMALLCAP. 

BSESENSEX gained 1,239.72 points or 1.86% to close at 67,838.63 points while NIFTY gained 372.40 points or 1.88% to close at 20,192.35 points. The broader indices saw BSE100, BSE200 and BSE500 gain 1.53%, 1.32% and 1.04% respectively. BSEMIDCAP lost 0.51% while BSESMALLCAP was down 1.14%. From the above one can visualise that Tuesday’s fall in the Smallcap and midcap broke the back of the segment. What next is yet to unfold. One should not be surprised if in the coming days and fortnight we see another sharp correction in this space. 

The Indian Rupee lost 24 paisa or 0.29% to close at Rs 83.18 to the US dollar. Dow Jones had a mixed week and gained on two of the five trading sessions and lost on three. The fall on Friday is a cause of concern as Dow lost 288 points. For the week Dow was marginally up and gained 41.65 points or 0.12% to close at 34,618.24 points. 

Its not raining but pouring IPOs. We have a burst of companies hitting the markets and it gives a feeling that promoters and merchant bankers are sensing something in the market which is forcing them to bunch their issues in such a concentrated manner. 

There were two listings during the week gone by. The first issue to list under T+3 has happened on Monday the 11th of September on both the main board and the SME exchange. The first to list on the main board was Ratnaveer Precision Engineering Limited which had issued shares at Rs 98.  The share closed the day at Rs 134.40, a gain of Rs 36.40 or 37.14% on Monday. It lost ground during the week and closed at Rs 116.21, a gain of Rs 18.21 or 18.58%. The share to list on the SME exchange was Basilic Fly Studio Limited. 

The second share to list was Rishabh Instruments Limited which had issued shares at Rs 441. The share closed day one at Rs 442.75, a gain of Rs 1.75 or 0.39%. The share is trading around the issue price and closed at Rs 448.15, a small gain of Rs 7.15 or 1.62%. 

The issue from EMS Limited was very well received. The issue was subscribed 75.28 times overall. The QIB portion was subscribed 153.02 times, HNI portion was subscribed 82.32 times and Retail portion was subscribed 29.78 times. There were 23.93 lac applications. The issue was open between Friday the 8th of September and Tuesday the 12th of September. The issue would be listed on Thursday the 21st of September. 

During the week we saw a number of issues open and we also saw one of the issues close for subscription as well. This issue was from R R Kabel Limited. The issue had opened on Wednesday the 13th of September and closed on Friday the 15th of September. The issue consists of a fresh issue of Rs 180crs and an offer for sale of 172.36 lac shares in a price band of Rs 983-1035. The company is a manufacturer of wires and cables and has also entered the ‘FMEG’ business of electrical goods. The issue was subscribed 18.69 times overall with the QIB portion subscribed 52.26 times, HNI subscribed 13.23 times and Retail 2.12 times. There were 8.62 lac applications. 

The second issue was from Zaggle Prepaid Ocean Services Limited which is tapping the markets with its fresh issue of Rs 392 crs and an offer for sale of 104.49 lac shares in a price band of Rs 156-164. The company is into the business of providing a platform for corporates to take care of their employee expense hassles and also offers a credit card which has prespecified limits as per the customer. The issue opens on Thursday the 14th of September and closes on Monday the 18th of September 23. The price band is Rs 156-164. At the end of day two of the issue the same was subscribed 0.44 times with QIB Zero currently, HNI 0.30 times and Retail 1.97 times. There are 60,000 forms so far received. 

The third issue is from Samhi Hotels Limited which is tapping the markets with its fresh issue for Rs 1,200 crs and an offer for sale of 1.35 cr shares in a price band of Rs 119-126. The issue opens on Thursday the 14th of September and closes on Monday the 18th of September. The company is a branded hotel ownership and asset management platform in India owning 4,800 keys. Currently the company is reporting losses and is expected to turn profitable in the next few quarters. At the end of day two of bidding, the issue was subscribed 0.13 times overall with QIB receiving no bids so far, HNI 0.07 times and Retail 0.61 times. There are a total of 44,000 applications received. 

The fourth issue is from Yatra Online Limited which is a travel company having a large corporate presence as well. The issue consists of a fresh issue of Rs 602 crs and an offer for sale of 121.31 lac shares in a price band of Rs 135-142. The issue opened on Friday the 15th of September and closes on Wednesday the 20th of September. Incidentally the shares of Yatra are listed on Nasdaq. At the end of day one, the bidding is lacklustre with the issue subscribed 0.11 times so far. The QIB portion is yet to receive bids, HNI portion is subscribed 0.03 times and Retail portion is subscribed 0.56 times. 

The bidding pattern clearly indicates that Retail investors apply in every issue irrespective of the demand from other categories. Probably they have become smarter or are willing to take a chance with the small size of their application. 

There are two other issues which are opening and closing for subscription in the week ahead. The first is from Signature Global (India) Limited. The issue consists of a fresh issue of Rs 603 crs and an offer for sale of Rs 127 crs in a price band of Rs 366-385. The issue opens on Wednesday the 20th of September and closes on Friday the 22nd of September. The company is a real estate player in the NCR region and is present in the affordable and lower mid segment housing segments. They are the largest in these segments in the region in terms of number of units supplied and had a market share of 19%. 

The second issue is from Sai Silks (Kalamandir) Limited which is tapping the capital markets with its fresh issue for Rs 600 crs and an offer for sale of 272.72 lac shares in a price band of Rs 210-222. The issue opens on Wednesday the 20th of September and closes on Friday the 22nd of September. The company is in the business of ethnic retail and is one of the top ten retailers in the segment having its presence in Southern India with 54 stores spread across Andhra Pradesh, Telangana, Karnataka and Tamil Nadu. They are a leading brand selling sarees amongst other products. 

The bombardment of primary issues in a bunch is a tell-tale sign and so is the drop in subscription levels. The SME primary market remains in a different orbit and is likely to continue for another fortnight before we see a lull in the month of October. 

Coming to the markets, expect volatility to continue to dominate market movements. Having crossed Mount 20K on NIFTY, a 3% spill over becomes a first target and one should expect a level of 20,600 sooner than later. This of course could come with corrections as we have already risen on the benchmark indices for eleven straight sessions. How much more is anybody’s guess but a correction however small or large is round the corner. 

The strategy for the week would be to shift gears to the large cap stocks simply because one has safety there and easier exit. The midcap and Smallcap space still look overheated and could witness yet another sharp correction. It makes sense to remain light in the markets as we have a trading holiday on Tuesday. This is the day when Lord Ganesh is welcomed home across the entire country with great fanfare. Take positions from Wednesday and trade cautiously.

Markets were in a very aggressive mood last week and gained on all five trading sessions. Something like this has not happened in a long time and they now seem set to make a new lifetime high and cross Mount 20K on NIFTY. BSESENSEX gained 1,211.75 points or 1.85% to close at 66,548.91 points while NIFTY gained 384.65 points or 1.985 to close at 19,819.95 points. The broader market saw BSE100, BSE200and BSE500 gain 211%, 2.37% and 2.36% respectively. BSEMIDCAP gained 3.93% while BSESMALLCAP was up 2.26%. The top performing sectoral index was the BSEPSU index which gained a massive 5.52%. With less than 180 points to go for NIFTY to touch the magical mark of 20K its now or never. 

The Indian Rupee was under some pressure and lost 22 paisa or 0.27% to close at Rs 82.94 to the US Dollar. Dow Jones gained on two of the four trading sessions, losing on the remaining two. It lost 261.12 points or 0.75% to close at 34,837.71 points. 

In the markets, momentum is being built to cross the obstacle of 20K on NIFTY. We had strong sustained gains during the week and on expected lines, the rally saw HDFC Bank finally participating. It gained Rs 49 or 3.11% to close at Rs 1,649. This helped the BSEBANKEX chip in with decent gains of 1.32%. This leaves just Reliance as the non-participating heavyweight stock in the benchmark indices. Though it did gain 1.49% or Rs 36 during the week, one expects much more from the heaviest of stocks. It may be expected that in the coming week markets have their best chance of making a new high with HDFC participating, Reliance close to a momentum setup and markets less than 1% away from a new life-time high. Conversely God willing, if the move fails, we could see a sell-off. FPIs are sellers and the market is driven by Domestic institutions buying and individual investors participating in the Smallcap and midcap space. 

In primary markets we saw the shares of Vishnu Prakash R Punglia Limited listed on the bourses. The company has issued shares at Rs 99 and was very well received. The share debuted at Rs 164.45 and closed under selling pressure at Rs 145.93, a gain of Rs 46.93 or 47.40%. By the end of the week, the share recovered lost ground and closed at Rs 172.75, a gain of Rs 73.75 or 74.49%. 

SEBI has introduced new norms for listing in T+3 days which would be mandatory from the 1st of December 23. Two recent issues would be doing the same voluntarily and would list on Monday the 11th of September. The first is the main board issue from Ratnaveer Precision Engineering Limited.  which had tapped the markets and was open for subscription between Monday the 4th of September and Wednesday the 6th of September. The price band was Rs 93-98. The issue was subscribed 93.94 times overall with the QIB portion subscribed 133.05 times, HNI portion subscribed 135.19 times and Retail portion subscribed 53.92 times. There were 20.77 lac applications in all. The other issue is from the SME platform, Basilic Fly Studio Limited. This issue has garnered over Rs 15,000 crs subscription and would also list on Monday. 

The issue from Jupiter Lifeline Hospital Limited was subscribed 65.42 times overall with the QIB portion subscribed 187.96 times, HNI portion subscribed 36 times and Retail portion subscribed 8.00 times. The issue was open from Wednesday the6th of September through the 8th of September and the price band was Rs 695-735. There were 14.6 lac applications. 

The issue from EMS Limited has opened on Friday the 8th of September. The price band is Rs 200-211 and the issue would close on Tuesday the 12th of September. The issue at the end of the first day was subscribed 3.71 times overall with QIB portion subscribed 0.09 times, HNI portion subscribed 5.97 times and Retail portion subscribed 4.72 times. There are 2.90 lac applications so far. 

In primary market news we have an issue opening on Wednesday the 13th of September and closing on Friday the 15th of September. The issue is from R R Kabel Limited which is into the business of making cables and wires and a small but emerging ‘FMEG’ business which contributes around 9% of the revenues currently. The price band is Rs 983-1,035 and consists of a fresh issue of Rs 180 crs and an offer for sale of 172.36 lac shares. The issue size would be around Rs 1,950 crs. 

There is plenty of action in the primary markets currently and until and unless we have a substantial correction in markets or a debacle in the primary markets, this action would continue. 

Coming to the markets, it’s a week where history is likely to be made with markets getting into a mood which borders euphoria or is already there. Expect the inevitable to happen with a rider, that if it fails there would be a short-term disaster in the form of a correction or they would cross the new high. Once they do so, the next target would become 3% higher or another 600 points on NIFTY and about 1,800 points on BSESENSEX. These levels would be after gaining or mounting 20K.

The strategy would be to ride the wave and bet on the heavyweight stocks in the benchmark indices to perform. Continue to book profits and sell those stocks from the midcap and Smallcap space which have outperformed. Keep your back covered and both eyes on the markets as corrections would also come without notice. Trade cautiously.