The week gone by had a mere four trading sessions but had plenty of action. At the end of the week, in which we celebrated our 78th Independence Day, markets staged a smart recovery on Friday and changed the sentiment completely. BSESENSEX gained on two of the four trading sessions and lost on two. BSESENSEX gained 730.93 points or 0.92% to close at 80,436.84 points while NIFTY gained 173.65 points or 0.71% to close at 24,541.15 points. The broader markets saw BSE100, BSE200 and BSE500 gain 0.65%, 0.66% and 0.57% respectively. BSEMIDCAP gained 0.43% while BSESMALLCAP was up 0.45%.
The Indian Rupee remained unchanged at Rs 83.96 to the US Dollar. Dow Jones had a great showing and was up 1,162.22 points or 2.94% at 40,659.76 points. Data from the US now gives plenty of comfort that the US FED in its meeting in September would cut interest rates. How much the same would be cut is still debatable, but the cut is imminent. One must also remember that the Presidential elections are due in November in the US and the FED would like to be cautious in whatever they do.
The week saw plenty of action and one needs to understand the importance of Friday. In the last four weeks, Friday has played a very significant role. The first was Friday the 26th of July, the first day of the August series. On this day, BSESENSEX gained 1,293 points whilst NIFTY was up 428 points. The next was Friday the 2nd of August when BSESENSEX lost 886 points while NIFTY lost 293 points. This was after markets made a new high on the previous day at 82,129 points and 25,078 points respectively. Incidentally this was followed by what could be termed as Black Monday when markets fell very sharply. The third such day was Friday the 16th of August, post-Independence Day, when BSESENSEX gained 1,321 points while NIFTY gained 398 points. With three out of four Fridays having a big movement, it sure becomes imperative to track future Friday’s as charts are all about patterns and history.
In primary market news, the week saw two listings during the week and one issue opening and closing for subscription. The week ahead would see one listing and two issues open and close for subscription.
The first issue to list was Brainbees Solutions Limited or better known as ‘Firstcry’ which had issued shares at Rs 465. Listing happened on Tuesday the 13th of August. The share debuted at Rs 625 and closed on day one at Rs 678.25, a gain of Rs 213.25 or 45.86%. During the course of the week, the share slipped marginally to close at Rs 669.05, a gain of Rs 204.05 or 43.88%.
The second share to list was Unicommerce Esolutions limited which had issued shares at Rs 108. This share too listed on Tuesday the 13th of August. The discovered price was Rs 230. The share closed day one at Rs 210.05, a gain of Rs 102.05 or 94.49%. By the end of the week, the share witnessed profit taking and closed at Rs 189.60, a gain of Rs 81.60 or 75.56%.
The issue from Saraswati Saree Depot Limited which had a price band of Rs 152-160, received excellent response. The issue overall was subscribed 107.52 times with QIB portion subscribed 64.12 times, HNI portion subscribed 358.65 times and Retail portion subscribed 61.88 times. There were 21.80 lakh applications in all. This issue would list on Tuesday the 20th of August.
The first issue to open would be from Interarch Building Products Limited. The issue would open on Monday the 19th of August and close on Wednesday the 21st of August. The price band is Rs 850-900. The issue consists of a fresh issue of Rs 200 crores and an offer for sale of 44,47,630 shares. The company is into the business of turnkey pre-engineered steel construction solution providers in India. It reported revenues of Rs 1,293.30 crores for the year ended March 2024. It had an EBITDA margin of 8.74% and a PAT margin of 6.67%. The company reported an EPS of Rs 58.68. The PE for the company is 14.49-15.34 which is attractive at current levels of the markets and when compared with its listed peers.
The second issue to tap the capital markets is Orient Technologies Limited which is opening its issue on Wednesday the 21st of August and closing on Friday the 23rd of August. The issue consists of a fresh issue of Rs 120 crores and an offer for sale of 46 lakh shares, in a price band of Rs 195-206. The company is an information technology (IT) solutions provider headquartered in Mumbai. The company reported revenues of Rs 602.89 crores for the year ended March 24 with an EBITDA margin of 9.39% and a PAT margin of 6.87%. There EPS for the year was 11.80 and the PE band is 16.53-17.46. The company has entered the promising and lucrative business of cyber security which is a crucial and fast growing area and also enjoying higher margins.
Ola Electric Mobility Limited which had issued shares at Rs 76 and listed on 9th of August is on a roll. Shares closed higher by 74.68% at Rs 132.76. They seem to have further momentum in them as at their annual event ‘Sankalp’, the company has launched four motorcycles in a range of Rs 75,000 to Rs 2,50,000. These motorcycle bookings have opened and they will be delivered from Diwali day 2025. The motorcycle market is the larger market with 70-72% market share amongst 2-wheelers in the country. However, in the EV space this share of motorcycles is a mere 1% and this gives the opportunity to the company to penetrate. Expect the share to gain momentum post this event.
Post the correction markets have recovered very sharply and smartly over the last couple of days. We are now near the resistance zone and markets need to decide where they are headed. For the immediate short term we seem to be in a broad trading zone with levels of 23,850-23,900 on NIFTY Acting as support. In case the market has strength, we need to quickly move past 24,550 and head towards 24,900 or thereabouts. In case markets struggle at current levels, we could see them slipping again.
In terms of FPI action they continue to be net sellers in the markets. One did see large short covering on Friday, but with their present mindset they are capable of again shorting the markets in the coming week. The trading strategy would be to avoid large exposures in either direction and play by the ear. At best it appears we will test the upper limits and then head down. Effectively trade in a broad range from hereon.
Trade cautiously.