Delhi, July 2 – Markets were on a tear last week, setting fresh all-time highs. The emergence of monsoon in the financial capital and Maharashtra, where there have been substantial rains for the previous 10 days, has contributed significantly to the hike.
The BSE SENSEX rose 1,739.19 points, or 2.76 percent, to end at 64,718.56 points, while the NIFTY rose 523.55 points, or 2.80 percent, to settle at 19,189.05 points. The wider indexes climbed as well, with the BSE100, BSE200, and BSE500 gaining 2.70%, 2.69%, and 2.59%, respectively. BSEMIDCAP increased by 2.86 percent, while BSESMALLCAP increased by 1.91 percent. All four trading sessions saw gains for the major indexes. The intraday highs on the BSESENSEX were 64,768.58 points and the NIFTY was 19,201.70 points.
The Indian Rupee held steady against the US Dollar, trading at Rs 82.04. Dow Jones had a fantastic week, advancing on three of the five trading days. It closed at 34,407.60 points, up 680.17 points or 2.02%.
The previous week saw two major subscription problems arise and close. The first was IdeaForge Limited, which was set to open from Monday, June 26th through Thursday, June 29th. Due to the change in holiday from Wednesday to Thursday, the problem had to be prolonged to Friday since it could not officially shut a day sooner than announced on Wednesday. As a result, the topic received increased attention. Overall, 106.05 people subscribed to the issue. The QIB component was subscribed to 125.81 times, the HNI portion 80.58 times, the Retail portion 85.25 times, and the Employee portion 96.57 times. There were a total of 25.07 lakh applications. It seems that some of the online brokerage businesses’ bidding algorithms had bugs, causing Retail subscriptions to be auctioned as workers. If corrective action is not performed, this category will have the greatest rate of technical rejections.
The second issue was from Cyient DLM Limited, which was open from Tuesday, June 27th until Friday, June 30th. The issue was subscribed to 71.35 times in total, with the QIB component subscribed 95.87 times, the HNI portion subscribed 47.75 times, and the Retail portion subscribed 52.14 times. There were a total of 16.91 million applications.
Senco Gold Limited is entering the capital markets with a Rs 270 crore new issuance and a Rs 135 crore offer for sale. The issue will be available for subscription on Tuesday, July 4th, and will conclude on Thursday, July 6th. The issue’s price range is Rs 301-317. As the name implies, the firm sells gold, diamonds, and platinum jewellery, as well as gold and silver coins and jewellery fashioned from precious and semi-precious stones. The corporation has a considerable presence in India’s eastern region. Senco has 136 showrooms, with 75 owned and operated by the firm and 61 run by franchisees.
For the fiscal year ending March 2023, the firm generated sales of Rs 4,108 crore. For the fiscal year ending March 2023, the firm earned Rs 158.47 crore in profit after tax. On a fully diluted basis, the EPS was Rs 22.87. The PE multiple on fully diluted EPS is an appealing 13.16-13.86 times. Given its peer group and markets at lifetime highs, the company’s asking price for its shares is reasonable and provides significant upside potential in the short to medium term.
FPIs have been investing extensively in the markets, which is adding gasoline to the fire and causing markets to increase on a consistent basis. The ultimate test will be the results, which will be available in roughly 7-10 days. The assumption is that they will outperform last year, and the markets are betting on it. Keep in mind that the misunderstanding about the condition of the monsoon seems to have been addressed in part by a decent breakout of the same.
With the markets in a good mood, private equity investors are selling a lot of shares. In most situations, the amount of the OFS is greater than the size of the IPO. Some concerns seem to be notable, and the manner in which they are handled raises many eyebrows.
Credit Access Grameen Limited’s recent OFS is one such example. On the 18th of May, the firm conducted its investor day event in Mumbai, where it announced its plans for the next five years. In less than six weeks after the event, the company’s promoters sold 90 lakh shares, or 5.9 percent of the stock, in block trades on Friday. Their stake as of March 31st was 73.68 percent. SEBI has made it necessary for corporations to publish their share sale strategy ahead of the start of any fiscal year. I’m not sure whether this information is publicly accessible or if it was obtained via public broadcast on stock markets. On the surface, it seems to be opportunistic, with an eye on current market circumstances.
In another situation, the MD of Equitas SFB said that he will not seek reappointment to the MD position in a message on May 19, 22. Share prices decreased for predictable reasons. Domestic mutual funds including as SBI, Sundaram, Canara, and ICICI Prudential raised their stake in the bank between September and October 22. Furthermore, DSP purchased a 10% share in the bank via a notification to the markets on November 22. The surprising revelation on December 22 that the MD has elected to remain on as MD is the frosting on the cake. Share prices soar as predicted, and all mutual funds make a fortune. Is this correct? Is this considered corporate governance? Isn’t this unfair to small investors who don’t have access to information about high-level board changes? Should the regulator act on publicly accessible information? One expects that the SEBI chairman would look into these concerns and provide a level playing field for small and major shareholders.
June futures finished on a high note. The series concluded on June 28th, with a gain of 650.95 points, or 3.55 percent, to finish at 18,972.10 points. It was a fantastic series for the bulls, with the strain of breaking new lifetime highs always on their minds.
In economic news, the GST revenue for June 23 was 1.61 lakh crore, a 12% increase. This is the fourth time the statistic has surpassed 1.60 lakh. This is undoubtedly beneficial to the economy.
Beginning on July 1st. HDFC Limited no longer exists and has been amalgamated with HDFC Bank. HDFC trade would continue until the 11th of July, which would be the final trading day, with the 12th of July serving as the record date for the merger.
Markets are seeing odd events as investors sell fixed income products such as REITs and INVITs to invest in equities. The urge to earn a fast buck is apparent, and it reflects the status of the market, where 5-10% weekly, if not daily, profits are expected. It is now necessary to revert from the midcap and smallcap market to the big cap space. There is safety in that sector, and the pump and dump principle does not apply.
In terms of markets in the next week, the United States will be closed on Tuesday, July 4th. Bulls might have a field day taking advantage of the holiday circumstances. Resistance in uncharted terrain is tough to estimate, but using the 3% method, NIFTY should have resistance around 19,500 points and BSESENSEX should have resistance around 65,400-65,500 points. NIFTY has support in the range of 18,550-600 points, while the BSESENSEX has support in the range of 62,800-62,900 points. Markets would be turbulent and volatile.
