Benchmarks may scale further new highs in near term

The period November 10-16 under review began with losses on the opening day itself. Then Friday happened on the back of US markets and inflation data. Then the next two days were sideways with one slightly lower day and one slightly higher day. The last day of the period under review saw markets recover from their opening losses and close positive. Whereas BSE Sensex gained 947.17 points or 1.55 per cent to close at 61,980.72 points, while Nifty gained 252.65 points or 1.39 per cent to close at 18,409.65 points. We are now a whisker's distance away from equalling or crossing the intraday all-time highs on the benchmark indices.

The all-time intraday highs of 62,245.45 points and 18,604.45 points on BSE Sensex and Nifty respectively were made on 19th October 2021. The closing highs were made a day earlier on the 18th of October, at 61,765.59 points and 18,477.05 points respectively.

Indian markets which were negative on the first day of the period under review got a big fillip after the rally in US markets. They gained close to 1,180 points on BSE Sensex and 320 points on Nifty. Thursday saw inflation data being released in the US. CPI data for October 22 came at 7.7 per cent against 8.2 per cent for September and 8.3 per cent 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 rate hike, as the steep 75 basis hikes was done consecutively over the last four occasions. Dow Jones for the period under review gained 432.09 points or 1.30 per cent to close at 33,592.92 points.

The issue from Archean Chemical Industries Limited which consisted of a fresh issue of Rs805 crores and an offer for sale of 161.50 lakh shares in a price band of Rs386 – 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.

The issue from Five Star Business Finance Limited, which had tapped the markets with its offer for sale of Rs1,960 crores in a price band of Rs450-474 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.

Kaynes Technology India Limited had tapped the capital markets with its issue, which consisted of a fresh issue of Rs530 crores and an offer for sale of 55.84 lakh shares in a price band of Rs559-587. The issue was oversubscribed 34.92 times overall with QIB portion subscribed 98.18 times, HNI portion subscribed 21.86 times, Retail portion subscribed 4.19 times and Employee portion 12.27 times. There were 8.08 lakh applications in total. The issue from Inox Green Energy Services Limited opened on Friday, 11th November and closed on Tuesday, 15th November. The price band of the issue is Rs61-65. The issue size is Rs740 crores with a fresh issue component of Rs370 crores and an offer for sale component of Rs370 crores. 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 per cent 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 Rs52.55 crores.

The issue from Keystone Realtors had tapped the capital markets with its fresh issue for Rs560 crores and an offer for sale of Rs75 crores in a price band of Rs514-541. The issue had opened on Monday, 14th November and closed on Wednesday, 16th 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.

DCX Systems listed on Friday. Against an issue price of Rs207, the discovered price was Rs286.25 on BSE and Rs287 on NSE. The closing price was Rs308.00, a gain of Rs101.80 or 49.18 per cent. At the end of Wednesday, the share lost some ground and closed at Rs270, down Rs38 from the opening day.

Shares of Fusion Microfinance Limited listed on Tuesday, 15th November. Against an issue price of Rs368, the discovered price was Rs360.50. The share closed at Rs324.70, a loss of Rs43.30 or 11.76 per cent. On Wednesday the share recovered to close at Rs345.20.

Shares of Global Healthcare Limited lasted on Wednesday at Rs398.15 against an issue price of Rs 336. The share closed at Rs417.25, a gain of Rs 81.25 or 24.18 per cent.

Shares of Bikaji International Foods Limited which had issued shares at Rs300 listed on Wednesday, 16th November. Against an issue price of Rs300, the discovered price was Rs321.15. The share closed at Rs317.45 with a gain of Rs17.45 or 5.81 per cent.

There are no more IPOs in the immediate future which have been announced. Only the listing of six issues remains as of now.

Coming to the period ahead 17th to 23rd November, we would be ending the period one day before November futures expire on Thursday the 24th of November. This would ensure that markets end the period on a volatile note. The market mood is very clearly inclined to posting a new high on an intraday basis in the near term. Levels of 62,245 and 18,604 on the benchmark indices will be crossed before any meaningful correction happens. How much higher is anybody's guess? For a minimum level, 600-750 on BSE Sensex and 200-250 points on Nifty, higher than previous highs is what would be reasonable. Play for the rally, but use any sharp movements on either side to enter or sell as the case maybe.

(The author is the founder of Kejriwal Research and Investment Services, an advisory firm)