The week gone by was a short week with four trading sessions. Markets gained on three of the four sessions and lost on one. The week saw BSESENSEX gain 297.57 points or 0.39% to close at 77,100.47 points while NIFTY gained 42.90 points or 0.18% to close at 24,056.00 points. BANKNIFTY gained 491.30 points or 0.85% to close at 58,177.05 points. The broader indices saw BSE100 gain 0.13% while BSE200 and BSE500 lost 0.09% and 0.11%. BSEMIDCAP was up 0.26% while BSESMALLCAP gained 0.95%. The highs of the week were at 77,803.18 points on BSESENSEX and at 24,261.60 points on NIFTY while the lows were at 76,082.51 points and 23,784.95 points respectively. The lows were made on Tuesday while the highs were made on Thursday.

The Indian Rupee lost 14 paisa or 0.15% to close at Rs 94.59 to the US Dollar. Dow Jones gained on three of the five trading sessions and lost on two. It gained 311.41 points or 0.60% to close at 51,876.11 points.

There were three IPO’s which closed during the week. The first was Turtlemint Fintech Solutions Limited which just about managed to get subscribed. The issue overall was subscribed 1.24 times with QIB portion subscribed 1.63 times, HNI portion 0.56 and Retail portion 1.11 times.  The issue would list on Monday the 29th of June and is likely to be under pressure at open.

The second was from Waterways Leisure Tourism Limited which closed on Thursday. The issue managed to get subscribed 1.72 times with QIB portion subscribed 1.06, HNI portion 1.23 times and Retail portion subscribed 4.4 times. This would list on Wednesday the 1st of July.

The third issue was from Advit Jewels Limited which was clearly the show stopper. It was a small issue for Rs 165.16 crores in a price band of Rs 130-138. The issue was subscribed a massive 212.63 times with QIUB portion subscribed 174.98 times, HNI portion 502.25 times and Retail portion 95.3 times. There were 32.04 lac applications in all. This issue would list on Wednesday the 1st of July.

The fourth and final issue was from CSM Technologies Limited which is tapping the markets with its issue which has opened on Wednesday the 24th of June and would close on Monday the 29th of June. The issue is in a price band of Rs 107-113. The issue at end of day 2 is subscribed 0.66 times overall with QIB portion subscribed 0.38 times, HNI portion 1.09 times and Retail portion 0.76 times.

The week ahead has two mainboard IPO’s opening and closing. The first is from cotton spinning company Aastha Spintex Limited which is tapping the markets with its issue which opens on Monday the 29th of June and closes on Wednesday the 1st of July. The issue consists of a fresh issue of 1.36 crore shares in a price band of Rs 125-136. The company is a ginning and spinning company from Gujarat with a ginning capacity of 12,000 tons and a spinning capacity of 26,000 spindles. The main object of the issue is to raise funds to acquire an existing spinning unit with a capacity of 36,000 spindles. While the present unit is in Halvad, the unit to be acquired is in Rajkot. The business is good and the unit to be acquired has interesting prospects as it is presently part of a diversified group where textiles is not a priority. With integration it is fair to assume that the acquired unit will start returning similar returns in course of time.  

The second IPO is from Knack Packaging Limited which is tapping the capital markets with its IPO for 2.71 crore shares in a price band of Rs 161-170. The issue would open on Wednesday the 1st of July and close on Friday the 3rd of July. The company is into PP bags and packaging material, and with innovation that it has achieved in its field produces significantly higher margins than peer set. 56% of its revenue comes from exports and this company was not affected with 50% tariff imposed as all its customers chose to continue buying the product. The company has a mix of own capacity and outsourced capacity which would be increased post the IPO. From its own capacity of 26,000 tons per annum, the company would increase its own capacity to about 70,000 tons. This capacity increase would happen over the next around 18 months. It would in the process stop procuring the outsourced capacity as it would have added its own lines. The issue is attractively priced and offers returns to investors with a medium term perspective.

Primary markets seem to be getting back into shape. As long as promoters and PE investors leave money on the table things would be fine. The problem would start when they want it all for themselves.

Though there is an agreement between the USA and Iran, there are a lot of sticky points. Firstly, it appears that Israel is a law unto itself and seems to be at crossroads with USA. Secondly it’s a sixty day ceasefire and there would be many hurdles to be accounted for before all is well. What we are seeing is the first of many hurdles on the way. Currently US has attacked and Iran has retaliated. Targets are the same. For Iran, its US assets in the Middle East while for USA it is Iran’s land and ships. Hormuz strait has become bigger than life and without doubt it is a big choke point.

The week ahead sees June futures expire on the last day of the month i.e. 30th June. The current series lead is 142.30 points or 0.60%. Two days and just 142 points to play with, anything can happen. It’s delicately balanced between the bulls and the bears. Let’s see who is the victor in this series.

There is a political buzz that there could be a cabinet reshuffle with some major changes in some key portfolios. If something like this was to happen, one could see huge volatility in the markets which could give the opportunity for 24,600 to be taken out. Keep your fingers crossed.

Coming to the markets in the week ahead. We have four listings and three IPO’s closing. This will give a fair state of mood and sentiment amongst investors. In terms of support, levels of 23,800 held on last week and the markets defended this level. Resistance of 24,600 is still some time and distance away and may be targeted in the coming week or weeks. One should refrain from having shorts in the market at this time as things are slowly but surely falling in place. Build on one’s portfolio and brace for the upcoming quarterly results due in about a fortnight from now.

Trade cautiously.

Arun Kejriwal (Market Veteran Investor & Opinion Maker)