Markets were on a roll last week and it seemed that there was no stopping their upward rise. They gained on four of the five trading sessions and continued to scale new heights on virtually every session.
There was a small setback on Thursday but markets bounced back quite sharply on Friday. At the end of the week, BSESENSEX was up 780.45 points or 1.20 per cent to close at 66,060.90 points, while NIFTY gained 232.70 points or 1.20 per cent to close at 19,564.50 points.
The broader markets saw BSE100, BSE200 and BSE500 gain 1.15 per cent, 1.18 per cent and 1.21 per cent respectively. BSEMIDCAP was up 1.36 per cent while BSESMALLCAP was up 1.73 per cent. The top sectoral gainer was BSEIT which was up 4.90 per cent led by sharp gains in Infosys of 7.06 per cent and TCS of 5.60 per cent. Suffice to say that the present mood and momentum do not talk of correction as yet.
The Indian Rupee gained 58 paisa or 0.70 per cent to close at Rs 82.16 to the US Dollar. Dow Jones too had a solid week and gained on four of the five trading sessions. Of these the gains came on the last four sessions continuously. Dow Jones gained 774.15 points or 2.29 per cent to close at 34,509.03 points.
The week gone by had plenty of action from the primary market. There were two listings, one issue which opened and closed for subscription and yet another which had its IPO roadshow for its issue which would open in the week ahead.
The first share to list was from Cyient DLM Limited which had issued shares at Rs 265. The share closed day one at Rs 420.75, a gain of Rs 155.75 or 58.77 per cent. By the end of the week, shares had gained further to close at Rs 501.45, a gain of Rs 236.45 or 89.23 per cent.
The second share to list was Senco Gold Limited which had issued shares at Rs 317. The share did well and closed day one at Rs 404.95, a gain of Rs 87.95 or 27.74 per cent. Recent listings by and large have been doing well.
The IPO from Utkarsh Small Finance Bank Limited which had tapped the markets with its fresh issue for Rs 500 crore was very well received. The issue price was between Rs 23-25 and was oversubscribed an overall 110.44 times. QIB portion was subscribed 135.71 times, HNI portion was subscribed 88.74 times and Retail portion was subscribed 78.35 times. There were 20.82 lakh applications which were received.
The IPO from Netweb Technologies Limited is tapping the capital markets with a fresh issue of Rs 206 crore and an offer for sale of 85 lakh shares in a price band of Rs 475-500. The issue opens on Monday the 17th of July and closes on Wednesday the 19th of July.
The company has two broad verticals. The first is it has the capability to integrate, design and manufacture high-performance computing equipment or super computers as per customer requirements. Second it also provides and assists in setting up private cloud and data centre related infrastructure. To make the offering complete it offers relevant software for the same as well.
The company reported revenues of Rs 444.97 crore for the year ended March 23 and profit after tax of Rs 46.93 crore. The EPS for the year was Rs 9.22 and on a fully diluted basis was Rs 9.07. The PE on a fully diluted basis is 52.37 to 55.13 times. The company has compared itself with players like Syrma, Kaynes and Dixon Technologies which in my knowledge are not in the business of manufacturing anything to do with computers or super-computers. The only rationale could be their PE multiple which ranges from 59.72 for Syrma to 76.77 for Kaynes and a staggering 102.97 for Dixon.
Coming to the markets in the week ahead, there is momentum and the force of the FPIs buying is with the market and its flow. This could drive the markets to a nice round level of the NIFTY touching 20K or 20,000 points, a gain of another 440 points. This would translate to about 1,400 points on BSESENSEX. This could be a possible target for the NIFTY in the current bull run.
There is plenty of activity that has happened around current levels and there are supports and resistance in between 100-150 points in either direction of the present levels. This would act as minor supports and resistances.
The major support would be around 18,900 points on NIFTY and at 64,250 on BSESENSEX. It makes sense if not already done so, to now focus on the large caps and stay away from the midcap and Smallcap space.
Markets would be wild and volatile and could pose challenges for the uninitiated at such elevated levels. Suffice to say that as long as meaningful inflows continue, it may be difficult to see or expect markets to correct meaningfully. Stay invested but remain cautious.
(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)
(With inputs from IANS)
