By Dilip Davda
It was a clean sweep of negative sessions for the secondary market, but the primary market had a very different week. India’s biggest IPO, Jio Platforms, came, was subscribed and closed. The Sensex and Nifty slid, and many operators believe the two are connected.
A losing week
The week started on a cautious note, but selling hit the market on Monday, and after the Dussehra break on Tuesday it kept sliding on profit booking at every rise. The Sensex lost 876 points on Monday and ended the week at 73,123.83. The Nifty closed at 22,600. Both are once again below the sentimental barriers of 73.25K and 22.75K.
The causes are familiar. The US-Iran-Israel and Russia-Ukraine tensions pushed crude to a record 112+ dollars a barrel, the dollar stayed firm and the rupee closed at Rs 94.94. At home, deficient rain threatens higher inflation and water scarcity. Seasoned operators also believe that funds were moved out of the secondary market to apply for the Jio Platforms IPO. If that is true, this selling is temporary and will ease. I would not bet on it, so let’s wait and watch.
Jio’s record IPO
Despite geopolitical tension, the Ambani-Musk imbroglio and rivals’ propaganda, the Jio Platforms IPO fared very well. It drew over 1.35 crore applications, the anchor portion was over 30 times subscribed, and the overall subscription was 21.36 times. For an issue of this size, these are noteworthy numbers.
Other mainboard IPOs
Closing during the week were Tonbo Imaging (132.81 times), Bonfiglioli Transmissions (46.05 times), Sahajanand Medical (14.21 times) and Zetwerk Manufacturing (3.10 times). Paras Healthcare closed at 2.34 times. Tonbo’s response was the standout, with over 132 times subscription.
Listings: a mixed bag
New listings were uneven, and the mixed trend will cast its shadow on future IPOs:
- Tonbo Imaging: +66%
- H D Fire: +23.39%
- Sahajanand Medical: +6.99%
- Zetwerk: +5.30%
- Fusion CX: +1.04%
- Bonfiglioli: 0%
SME: the slowdown continues
On the SME platform there was only one listing, Shellz India, at flat (0%) after a subscription of 58.54 times. It shows once again that a high subscription number does not guarantee a listing gain. Core4 Engineers opened and had received just 0.08 times subscription till Friday’s close. The issue closes on 27 October. Wiscon Ind. and Carver Robo. are lined up for the coming week.
Primary market operators attribute this reduced activity to SEBI’s revised SME rule framework, which is under consideration. Until it is announced, I expect SME activity to remain subdued. The regulator’s decision will set the course for this segment, so stay tuned.
What’s lined up this week
For the ensuing week, the mainboard has EAAA India, BLS Polymers, SFC Environmental, M. K. Sons and Bombay Coated. There is no NCD this week, and Shivam Auto brings a rights issue. Last week we saw an NCD opening from Muthoot Fincorp and rights issues from Ola Electric and Continental Controls.
Markets for the week ahead: very briefly
With 845+ board meetings lined up, the market will stay stock-specific. Crude and the rupee will keep tempering sentiment.
Do your own due diligence
The festive season is on, but the market is not in a festive mood. With mixed listings, a slowing SME segment and a strong response to a mega issue, primary market investors should be selective. As I always say, GMP is “Grossly Manipulated Price”, so do not go by it. Study the business and the pricing, and consult your financial advisor. Every investment in the securities market carries market-related risk, so stay tuned with the times and invest wisely.
