Markets in the week gone by were unable to make up their mind what they wanted to do. They tried to go up, but failed. Similarly, there was not much selling pressure either which could do serious damage on the downside. To add to the uncertainty, global markets did nothing either. At the end of it all they ended with small losses after four consecutive weeks of gains. BSESENSEX lost 131.56 points or 0.21% to close at 61,663.48 points while NIFTY lost 42.05 points or 0.23% to close at 18,307.65 points. The broader markets saw BSE100, BSE200 and BSE500 lose 0.53%, 0.68% and 0.68% respectively. BSEMIDCAP lost 1.30% while BSESMALLCAP was down 0.81%. Markets gained on two of the five trading sessions and lost on the remaining three. There were no significant moves in either direction. 

The Indian Rupee lost 88 paisa or 1.09% to close at Rs 81.68 to the US Dollar. Dow Jones gained on two of the five trading sessions and lost on the remaining three. There were double digit daily changes on three of the five days, indicating that markets there are pondering on their next move. The week ended virtually flat, down a mere 2.17 points or 0.01% to close at 33,745.69 points. 

The week saw three IPO’s list during the week. The first was Fusion Microfinance Limited which had issued shares at Rs 368, listed on Tuesday the 15th of November. The share debuted at Rs 360.50 and lost ground to close at Rs 324.90, a loss of Rs 43.10 or 11.71%. By the weekend the share had regained some ground to close at Rs 336.85, a loss of 8.46%. 

The second share to list was Global Health Limited which had issued shares at Rs 336. The share listed on Wednesday the 16th of November. The share debuted at Rs 398.15 and closed at Rs 415.65, a gain of Rs 79.65 or 23.70%. At the end of the week, the share closed at Rs 413.75, up 23.14% over the issue price. 

The third share to list was snack maker Bikaji International Foods Limited which had issued shares at Rs 300. The share listed on Wednesday the 16th of November. The debut price was Rs 321.75 and closed at Rs 317.45 at the end of the day, up Rs 17.45 or 5.81%. By the end of the week, the share closed at Rs 317, up 5.67%. 

The issue from Inox Green Energy Services Limited had opened on Friday the 11th of November and closed on Tuesday the 15th of November. The price band of the issue was Rs 61-65. The issue size is Rs 740 crs with a fresh issue component of Rs 370 crs and an offer for sale component of Rs 370 crs. The issue was subscribed 1.65 times overall with QIB portion subscribed 1.12 times, HNI portion undersubscribed at 0.50 times and retail portion subscribed 4.97 times. This is an issue where only 10% can be allotted to Retail and the shortfall in HNI can be adjusted with QIB oversubscription. The issue will see the OFS portion being reduced by Rs 52-55 crs. 

The issue from Keystone Realtors had tapped the capital markets with its fresh issue for Rs 560 crs and an offer for sale of 75 crs in a price band of Rs 514-541. The issue had opened on Monday the 14th of November and closed on Wednesday the 16th of November. The issue was subscribed 2.11 times overall with QIB portion subscribed 4.04 times, HNI portion 3.19 times and Retail portion subscribed 0.55 times. There were 58,427 applications in all. 

Results for the quarter July-September 22 have been more or less completed and the summary is that there has been a steady improvement in raw material availability. Prices have stopped showing a rising trend and have corrected partially. They are not back to pre-covid levels. The big positive is in global shipping where one has seen severe corrections and freight rates are now more or less near pre-covid levels. Availability of freight containers and ships are easy and more predictable. All this leads one to believe that while the outlook is better and positive, Corporate India needs to perform better to justify current valuations which are no longer cheap. 

The week ahead sees November futures expire on Thursday the 24th of November. The current value of NIFTY at 18,307.65 points is higher by 570.70 points or 3.22%. The bulls have had the upper hand through the series and they would hope to push the gains further in the four trading sessions remaining for expiry. Expect markets to make up their mind which way they are headed during the week.

There would be four issues which list during the week. They are Archean Chemical Industries Limited and Five Star Business Finance Limited which would list on Monday. This would be followed by Kaynes Technology India Limited which would list on Tuesday. This would leave Inox Green Energy Services Limited and Keystone Realtors Limited which would list during the latter half of the week. Post this, there are no pending IPOs in the market as of date. A couple more are expected to happen during the latter half of the week but details are yet to be announced. 

Coming to the markets in the week ahead, expect clear movement after a week of consolidation. The big move in either direction must happen in the week ahead. While indicators are that the new lifetime intraday highs are likely to be made this week after markets trading at lifetime closing highs, it’s a question of now or never in the immediate short term. In case the up move doesn’t begin this week, we could have missed the bus for the time being. In case the rise doesn’t happen, there is every possibility that markets could go into a sideways move with a negative bias and drift or fall. There could be bouts of selling which could be sharp. With expiry during the week, this is the best setup for bulls to press the pedal. 

The rally if it happens will see the market breadth increase significantly. Midcap and Smallcap stocks will see large participation and price movement. Take that as a cue for the up move in the market. Keep eyes and ears glued to the ground and movement in mid and small cap stocks. They hold the key.

Markets had a topsy-turvy time in the four trading sessions during the last week. While at the end of Thursday, it looked like we would end with losses, the sharp move on Thursday night in the US, saw markets globally turn on their heels and register big gains. Friday saw markets gain close to 1,180 points on BSESENSEX and 320 points on NIFTY. This not only wiped out the losses but also helped in the week closing with gains. BSESENSEX gained 844.68 points or 1.39% to close at 61,795.04 points while NIFTY gained 232.45 points or 1.28% to close at 18,349.70 points. The broader markets saw BSE100, BSE200 and BSE500 gain 1.04%, 0.87% and 0.77% respectively. BSEMICAP lost 0.71% while BSESMALLCAP lost 0.42%. Friday’s rally was fairly skewed and was led by a handful of stocks and hence the same was not reflected across the market. Indian markets gained on two of the four sessions and lost on the remaining two sessions. 

The Indian Rupee had a very strong showing and gained Rs 1.64 or 1.99% to close at Rs 80.80 to the US Dollar. Dow Jones had a great week on the back of encouraging fall in inflation numbers. CPI data for October 22 came at 7.7% against 8.2% for September and 8.3% for August. This gave great confidence to the US markets and they gained 1,201 points on Thursday post the announcement. Following this, FED Chairman also hinted that the time may have come to pause the steep 75 basis hikes done consecutively over the last four occasions. 

In primary market news the rush of IPOs continues. There was the listing of DCX Systems Limited which had issued shares at Rs 207 on Friday. The discovered price was Rs 286.25 on BSE and Rs 287 on NSE. The closing price was Rs 308.00, a gain of Rs 101.80 or 49.18%. 

The issue from Bikaji Foods International Limited which was entirely an Offer for sale for Rs 881 crs in a price band of Rs 285-300 was oversubscribed 26.93 times. The QIB portion was subscribed 80.63 times, HNI portion 7.09 times and Retail portion 4.75 times. 

The issue from Global Healthcare Limited which consisted of a fresh issue of Rs 500 crs and an offer for sale of 507.61 lac shares in a price band of Rs 319-336 was oversubscribed 9.75 times. The QIB portion was subscribed 29.51 times, HNI portion was subscribed 4.07 times and Retail was subscribed 0.89 times. 

The issue from Five Star Business Finance Limited which had tapped the markets with its offer for sale of Rs 1,960 crs in a price band of Rs 450-474 received tepid response. The issue was subscribed 0.73 times overall with the QIB portion subscribed 1.87 times. The HNI portion subscribed 0.65 times and Retail hardly subscribed at a mere 0.12 times. As this issue was entirely an offer for sale issue, it met with the minimum subscription norms, and would be treated as closed, even though it was not fully subscribed. 

The issue from Archean Chemical Industries Limited which consisted of a fresh issue of Rs 805 crs and an offer for sale of 161.50 lac shares in a price band of Rs 386 – 407 was oversubscribed. The issue was subscribed 48.58 times by QIB, 15.34 times by HNI and 10.19 times by Retail. The overall issue was subscribed 32.53 times. 

Two issues are currently open. The first is from Kaynes Technology India Limited which has tapped the capital markets with its issue which opened on Thursday the 10th of November and would close on Monday the 14th of November. The issue consists of a fresh issue of Rs 530 crs and an offer for sale of 55.84 lac shares in a price band of Rs 559-587. The company Kaynes is an end-to-end and IoT solutions enabled electronics manufacturing player, having capabilities across the entire spectrum of electronics system design and manufacturing (ESDM) services. It has an order book of Rs 2,200 crs to be executed over the next 18 months. This implies that the revenues which were at Rs 710 crs for the year ended March 22 would double to Rs 1,400 crs or thereabouts, if the order book is to be completed in 18 months. This doubling would happen with the capacities available with the company. 

The company has also received approval under the PLI (production linked incentive scheme) and is in the process of setting up the new facility under the same scheme. This would help the company in achieving a substantial jump over its existing revenues as the new capacity under the PLI scheme has a high asset turnover ratio. 

The company reported revenues of Rs 710 crs for the year ended March 2022 and a profit after tax of Rs 41.67 crs. The revenues for the first quarter ended June 22 have risen to Rs 199.97 crs with the profit after tax at Rs 10.04 crs. The EPS for the year ended March 22 is Rs 9.70 basic and fully diluted at Rs 8.93. For the first quarter June 22, the EPS is Rs 2.11 on a fully diluted basis. The PE band of the issue is 62.60 – 65.73. The business is interesting and promising. It offers appreciation on listing.

The issue from Inox Green Energy Services Limited has opened on Friday the 11th of November and would close on Tuesday the 15th of November. The price band of the issue is Rs 61-65. The issue size is Rs 740 crs with a fresh issue component of Rs 370 crs and an offer for sale component of Rs 370 crs. The company going public services and maintains the WTG which are made by Inox Wind. The parent Inox Wind has an order book of 1,488.7 MW of WTGs. This becomes a healthy pipeline of future orders. To this is the comfort of already servicing 2,792 MW of WTGs. The company is present in eight wind rich states of the country. In terms of manpower and technology, it is fully equipped and also has the backing of the parent for supply of timely spares. While there is opportunity and work available today, the pipeline going forward would be even stronger as the government is committed to increasing incremental wind power and renewable energy generation going forward. The parent has developed and successfully launched an efficient 3.3 MW WTG, which will help in generating higher electricity at more affordable rates. 

The objects of the fresh issue include a repayment of debentures of Rs 260 crs. This would bring down the debt and because of interest saving, help the company earn profits at the net level. In terms of revenues, the company reported revenues of Rs 172.16 crs for the year ended March 22 and EBITDA of Rs 100.26 crs. In the first quarter of June 22, revenues were Rs 61.78 crs and EBITDA was Rs 18.93 crs. The company has not made a net profit, hence there is no EPS and also no PE ratio. 

The prospects for the company are good in the long run. There is every possibility that in the run-up to profitability, the share may be available at a price lower than the issue price. Look to buy at prices lower than the issue price for profits in the long run. 

The final issue is from real estate company Keystone Realtors popularly known as Rustomjee. The company is tapping the capital markets with its fresh issue for Rs 560 crs and an offer for sale of 75 crs in a price band of Rs 514-541. The issue opens on Monday the 14th of November and closes on Wednesday the 16th of November. The company is present in the rich and opportunity providing MMRDA area of Mumbai where it does new projects and also redevelopment projects.  

The company had revenues of Rs 1,269.36 crs for the year ended March 22 and a profit after tax of Rs 135.82 crs. The company reported an EPS of Rs 13.96 for the year. The PE band is 36.83-38.76. The NAV for the year ended March 22 is Rs 93.24. The comparison with its peers makes it in line but more expensive than Macrotech developers and Oberoi Realty and cheaper than Godrej Properties and Suntec. The company has an interesting model and should be looked at for investments. 

Coming to the markets, we have made 52-week highs but not lifetime highs. However, we are very close to them and are just within handshaking distance. An attempt to break them would be made next week and the momentum that markets got last Friday after Thursday’s rally in the US should hold markets in good stead. The note of caution is however that markets were rather skewed last week. It would therefore be important to see that for markets to sustain these new heights, markets must gather breadth and build on the rally of last week. If that does not happen, we may make new highs and then correct. 

The strategy for the week would be to ride the rally and use strong rallies to book profits as the market is skewed. If markets improve their breadth, we could look at re-entering markets. Till then be nimble footed and have eyes on the ground looking for first signs of trouble.