By Arun Kejriwal This week was four days long, Friday being a day off.Although the week started on a positive note, that wasn’t all there was to be for it.The markets lost ground over the three remaining days.BSESENSEX lost 1,050.68 points, or 1.73 percent to end the week at 59.636.01 points.NIFTY fell 337.95 point or 1.87 percent to close at 17,764.80.BSE100 and BSE200 lost 1.74 percent, 1.85 percentage and 1.81 percent, respectively, in the broader indexes.BSEMIDCAP fell 1.71 percent, and BSESMALLCAP dropped 1.49 percent.
To close at Rs.74.24 against the US dollar, the Indian Rupee lost 20 paisa (or 0.27%).Dow Jones suffered losses in four trading sessions, losing 498.33 Points or 1.38 Percent to close at 35.601.98.
Reliance Industries has announced that it will cancel its O2C de-merger.Aramco, who had been expected to invest 20% in the de-merged O2C company, decided to reconsider the investment.
Reliance isn’t the only company to have changed its mind on mergers or de-mergers.Reliance had previously decided to merge its media businesses, but then it changed its mind.
Reliance Industries’ news may be bad, but it will not have a negative effect on its share price for the near future.Reliance Industries shares fell by Rs 120 (or 4.63%) in the past week.
Primary market news indicates that the highly debated and talked-about airline issue, now called Go First, will likely tap capital markets starting on the 8th December.
In the week that has just passed, the company filed the September 2021 half-year results.It continues to lose money like other players in the aviation industry.Positive aspects include the improved performance parameters.
Tarsons Products Limited’s primary issue was subscribed 77.49 Times.QIB subscribed 115.77, HNI subscribed 184.58 and retail subscribed 10.55.The retail issue received 9.07 percent of the 22.22 million applications.
Go Fashion (India) Limited has opened its primary issue with a fresh issue worth Rs 125 crore.It also offers 1,28,783,389 shares at a price range of Rs 655-690.This issue opened Wednesday, November 17, and will close Monday, November 22, The issue has been subscribed 6.87x, with the Retail section subscribed 24.63x.The number of applications received is 14.37 lakh.
It sells women’s bottomwear, including western pants and trousers, jeggings and Treggings for men, as well as shorts and leggings for women.
Gross margins are approximately 55% and EBITDA margins range from 28-32%.It reported net margins in FY20 of 13.4%, but it also reported losses for FY21 and FY22.It has suffered severe losses as a result of the pandemic.
The FY20 revenues were Rs 396 crore, which was Rs 282 crore in FY21.They were Rs 40 crore for the FY22 first quarter.
Revenues in the FY21 corresponding quarter were Rs 21 million
This issue contains a substantial portion of offers for sale.It is priced excessively in view of primary market mood.
Five listings were made during the week.Three of these took place on Monday, and two on Thursday.
PB Fintech was the first company to list, which is also the owner of Policy Bazar.The shares, which had been issued at Rs 980 on day 1, ended the first day at Rs 1,202.90.This is a gain Rs 222.90 (22.74%).The share gained more to close at 35.81 percent by the end of week.
Sigachi Industries Limited was the second to be listed.They had previously issued shares at Rs 163, and enjoyed some of their best returns in more than 12-13 years.Day one ended at Rs 603.75, representing a gain in Rs 440.75, or 270.40 percent.The gains were down to 251.01 percent at the close of the week.
SJS Enterprises Limited, which issued shares for Rs 542, was the third issue.Day one ended at Rs 509.85.This was a loss Rs 32.15, or 5.93 percent.At weekend, the losses grew to 13.49 percent.
Sapphire Foods Limited was the fourth listed share.It had issued shares at Rs 1180, and close day one at Rs 1.216.05.This gain of Rs 36.05 (or 3.06%) is what prompted it to be added to the list.
India’s biggest fund raise, One 97 Communications Limited (owner of super-app Paytm), was the fifth and last listing.The share was issued at Rs 2.150, and closed at Rs 1.564.15.This is a loss at Rs 585.85 (or 27.25%).This stock’s below-expected performance would have an impact on not only the future for the newly listed companies, but also companies that are looking to tap capital markets.
Many of the newly listed companies suffered significant losses Thursday.
The market is under severe pressure.
Primary market issues at high valuations, as well as a rash of secondary market problems are reducing liquidity.FPIs, foreigners have been aggressive sellers.They have sold stock worth Rs.4,000 crore even Thursday.Paytm’s delivery volume was around Rs 1833 crores.One could assume that FPIs would have bought at least 50% of this amount.
This sales number is alarming even though it’s not a large one.
On Thursday, November futures for NIFTY expire.NIFTY futures have fallen 0.52 percent since last week’s fall.They are currently negative at 92.45 point.With four trading sessions remaining, this is a small number.However, it will put pressure on bulls.
Surely the bears who have held the upper hand for a while would not be willing to yield.The next four trading sessions will be a fascinating battle.
Parts of Europe face pressure regarding Covid-19.Austria has imposed a total lockdown, while Germany is considering tougher measures.The vaccination campaign in India is ongoing.We have witnessed a total number of 116.51 million vaccinations.76.59 crillion were the first shots and 39.92 Crillon had been fully vaccinated.These numbers are increasing, and earlier complacency toward vaccination appears to be decreasing.
Market volatility is guaranteed if you visit the markets during the week ahead.
With expiry only four days away, it would be difficult to predict when markets will close.As mentioned, we have been under stress and FPI or FII have been net sellers.
Reports are circulating about market valuations at which they are trading.A combination of overheating and net selling would make sure that the markets do not go anywhere.
They would occasionally bounce, but rallies would be few and far between.
You could buy large-cap stocks at sharp discounts and then sell during rallies.
Cash should be kept on hand and exposure to smallcap and midcap stocks must be reduced.
Kejriwal Research and Investment Services was founded by Arun Kejriwal.These views are my own.
arun/ksk/
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