All eyes on the exit

PM Narendra Modi c with Sri Lankan President M Sirisena l and PM R Wickremesinghe r in Norwood east of Colombo Modi desires a quantum jump in relations with Sri Lanka as New Delhi jostles with Beijing for influence in the island nation PicsAFPMarkets were on a roll last week and a sharp Wednesday rally ensured decent gains for the benchmark indices They continued to make new lifetime highs with the BSESENSEX gaining 32935 points or 110per cent to close at 3018815 points NIFTY gained 11560 points or 124per cent to close at 940090 points The broader indices saw the BSE100 BSE200 and BSE500 close with gains of 132per cent 128per cent and 129per cent respectively BSEMIDCAP gained 092per cent and BSESMALLCAP gained 113per centTops and flopsThe top sectoral gainer was BSEREALTY up 571per cent followed by BSEAUTO and BSETECH an identical 326per cent BSEIT was up 280per cent On the losing side there was just one BSEPSU down 029per cent In individual stocks the top gainer was Idea Cellular up 1297per cent followed by DLF 1198per cent Others included Bharti Airtel 588per cent Vedanta 584per cent a followed by Hero Moto 518per cent The losers were led by Yes Bank down 776per cent followed by some of the PSU banks like Canara Bank 720per cent Union Bank 655per cent and PNB 322per centDow Jones lost 11033 or 053per cent to close at 2089661 points The Indian Rupee gained 7 paisa or 011 to close at Rs 6430 Currently global cues do not indicate any trends and markets seem to be moving in a band without any directionAction in plentyThe primary market continued to see a lot of action The issue from government company Hudco was very well received The issue opened on Monday May 8 and closed on Thursday May 11 and was oversubscribed 7955 times The issue was for 2040 crore shares in a price band of Rs 5660 The QIB portion was subscribed 5545 times HNI 33036 times and retail 1079 times What is heartening is that the share received applications from 2013 lakh investors and created a new record beating the previous one of 1975 lakh applications in DMart What enthuses most from a capital market perspective is that these new investors are coming from Tier 2 and Tier 3 towns New demat accounts of over three lakh investors have been opened in the last couple of months Also the SIP flow into mutual funds is now Rs 4200 crore monthly A large portion of the incremental flows are again from these same townsNumber of issuesShares of S Chand and Company Limited listed on Tuesday May 9 and survived a big scare managing to close with minor gains of about one percent The share issue was very heavily subscribed with HNI portion subscribed a massive 20465 times The overall issue was subscribed 5949 times At close of the week the share closed at Rs 62205 down Rs 4795 or 715per centOne wonders what ails the education sector with issue after issue failing to rise upto expectations The previous issue was from C L Educate which continues to trade below the issue priceThe week ahead sees the issue from PSP Projects Limited which opens on Wednesday May 17 and closes on Friday May 19 The company is raising between Rs 20664 crore to Rs 21168 crore in a price band of Rs 205210 The company is into the business of construction and is a contractor developing special projects in Gujarat particularly AhmedabadYardstick for successThe other issue during the week is the invit from India Grid Trust which opens this Wednesday May 17 and closes on Friday May 19 The trust is raising Rs 2250 crore in a price band of Rs 98100 The lot size is 10206 units and in multiples thereafter of 5103 units The success of IRB invit is unlikely to be seen in this issue because of one fundamental difference Returns to investors in the issue of India Grid in the initial years would be entirely by way of interest income while in the case of IRB it was a combination of interest and dividendThe interest component was initially to be higher and then reduce as time went by The interest income would attract tax for individuals and therefore reduce the net returns from the product By Friday we will know the overall response to the issue which is into transmission lines and offers the investor an asset with income earning capacity for over 30 yearsSlew of resignationsShilpi Cable company on May 11 informed the exchange that the board would meet for issue of bonus shares on May 28 This notice was issued at 1428 hours At 1520 hours it issued a notice that the Company secretary has resigned with effect from May 1 At 1607 it issues a notice that the CFO has resigned with effect from May 1 At 1614 it issued a notice that the independent director has resigned with effect from May 3 The timing of the bonus issue and the resignations raise question marks One hopes the regulator looks into the same The share price in recent times has fallen from Rs 22560 on April 20 to Rs 6745 on Friday May 12Markets are in a bull run and they would not let things go out of control quite easily Enjoy the same as it lasts but be quick to exit when you sense trouble Opportunities aboundArun Kejriwal is founder of the Mumbaibased advisory firm Kejriwal Research amp Investment Services Pvt LtdDisclaimer No financial information whatsoever published anywhere in this newspaper should be construed as an offer to buy or sell securities or as advice to do so in any way whatsoever All matter published here is for educational and information purposes only