A short week could see a dead cat bounce back (Market Watch)

The markets behaved according to expectations and gained ground during the first two trading sessions of the past week. After that, it was painful to see the markets plummet for the remaining three days. The net change for the week saw BSESENSEX lose 1,514.69 points or 2.49% to close at 59,306.93 points while NIFTY lost 443.25 points or 2.45% to close at 17,671.65 points .

The broader markets saw the BSE100, BSE200 and BSE500 lose 2.24 percent, 2.15 percent and 2.06 percent, respectively. BSEMIDCAP and BSESMALLCAP lost roughly half of the benchmarks to 1.13% and 1.25% respectively. The fall was so severe that there were no sector winners and therefore the one that fell the least was BSEHEALTHCARE down 0.13 percent while the one that fell the most was BSEBANKEX down 3.15 percent.

The Indian rupee gained one paisa or 0.01 percent to close at Rs 74.88 to the US dollar. The Dow Jones hit a new intraday lifetime high of 35,893 points during the week and closed at its all-time high of 35,819.56 points. Dow during the week gained 142.54 points or 0.40% to close at 35,819.56 points. While Dow appears to be climbing a wall of concern, there does not appear to be a stopping rise as currently liquidity seems unstoppable.

In India, we are concerned on three main fronts. First, is the correction complete at this time. Second, REITs have been big sellers this month with net sales exceeding Rs 25,000 crore in October. Will it stop? Third, the freely talked about liquidity seems to be no longer the topic of discussion, as the sale of REITs and a wave of issuance in the primary market would suck all the money available into the system over the next 10 to 12 calendar days. .

Our markets have become very choppy and volatile and, technically speaking, appear poised for a sharp rebound over the coming week. To what extent, to what extent and to what extent are the questions I seek answers to. Don’t have one yet, but given that the short three-session swap before Diwali begins would see a bounce back at the earliest. With Thursday and Friday being normal days in world markets, this Wednesday can be a shy and dull trading as people hold their positions light before the long weekend.

October futures came under pressure during the week and managed to close with small gains for the series. The October series gained 239.10 points or 1.36% to close at 17,618.15 points. There was another drop on the first day of the November series which started with a loss of 185.60 points on NIFTY on the first day of the November series.

The week has seen a lot of drama on the IRCTC counter. The week began when the share came under pressure when it was announced that there would be a distribution of commodity fee income charged by the IRCTC between the government and the IRCTC. The market was simply taking this into account when another report surfaced that the government had withdrawn its proposal. Something as strange as this can only be done by the government and it has shown it. The first part of the news saw the stock hit an intraday low of Rs 605.10. The stock rallied strongly enough to end the day at Rs 845.65, a weekly loss of Rs 78.72 or 8.52 percent.

There are three primary market issues that would open on November 1 and close on November 3. Two other shows were opened on Thursday and Friday and would close on Monday and Tuesday accordingly.

The first issue comes from FSN E-Commerce Ventures Limited, owner of the popular cosmetics and fashion brand Nykaa, is tapping the capital markets with its new issue for Rs 630 crore and an offer to sell 4,19,72,660 shares in a price range of Rs 1,085 to Rs 1,125. The show opens Thursday October 28 and ends Monday November 1. The issue size at the high end of the price range would be Rs 5,351.92 crore. EPS for the year ended March 2021 was Rs 1.34. The PE multiple based on this BPA is 809.70 to 839.55. The company first reported profit in FY21 and was previously a loss making company. Interestingly, the profits made in the first quarter of fiscal 22 were a tiny Rs 0.07 EPS per share.

The company sells beauty and personal care products under the Nykaa brand and clothing and accessories under Nykaa Fashion. Nykaa started to create its own exclusive brands and bought exclusive brands in these segments to increase its product offering. He wants to move up the value chain by selling more luxury brands that have higher ambitious demand and sell well in Tier 2 and Tier 3 cities. It goes without saying that they also sell in subways and Tier 1 cities, but the demand from ambitious buyers is the biggest attraction.

There is a strong gray market premium which fluctuates between 60 and 6% of the issue price. Sign up for the lottery and, if successful, cash it in from day one.

The second issue comes from Fino Payments Bank Limited and taps the capital markets with its new issue of Rs 300 crore and an offer to sell 1,56,02,999 shares in a price range of Rs 560 to 577. The issue would bring in 1 Rs 200.29 crore at the top end of the group. The show opened on Friday October 29 and will close on Tuesday November 2.

The company is a for-profit business for the last fiscal year ended March 2021 when it recorded revenue of Rs 791 crore and net profit of Rs 20.74 crore. EPS for the year was Rs 2 , 62. In the three months ended June 2021, revenue increased to Rs 206.24 crore from Rs 151.32 crore in the June 2020 quarter. Likewise, net profit increased to Rs 3.13 crore from Rs 1, 85 crore earlier. EPS for the quarter was Rs 0.40 versus Rs 0.24 earlier.

The PE multiple for the IPO company is 213.74 to 220.23 times based on year-end numbers in March 2021. The business model is to allow its traders to become traders. mini-branches using the network and infrastructure of Fino payment banks. While there is no active gray market worth discussing, it would force an individual to take a call on this stock. With investors being spoiled for choice between November 1 and November 8, when up to six issues have reportedly been opened and all but one closed, investors are advised to choose and avoid anything that is second-rate.

The third issue is from PB Fintech Limited, the holding company of Policy Bazaar is tapping the capital markets with its new issue of Rs 3,750 crore and a sell offer of Rs 1,933.50 crore and a sell offer of 2,67,500 actions. The price range is Rs 940-980 and at the higher end of the price range the issue would earn Rs 5,709.71 crore. The show opens Monday, November 1 and ends Wednesday, November 3.

The company has two major verticals known as Policy Bazaar and Paisa Bazaar. As their names suggest, the former is in the insurance industry where it offers policies for vehicles, health and life, as well as savings and retirement products. The Paisa Bazaar vertical offers unsecured loans, credit cards, secured loans, credit scores, and credit counseling services.

Currently, the company is making losses, but these have declined considerably over the past three years. I think the subject of the issue clarifies this point where it mentions “new opportunities to expand our customer base, including our offline presence”. This is a strong statement and reflects the urgent need for the business to have a better reach to the customer, which would involve reaching the customer through a call center or in-person visit to sell a life insurance product because it is a push product and Medicare is part of both. Competition in these two segments at present is low as the traditional life insurance policy was sold by a friend or friend of a friend etc.

There is a gray market price for this issue that is in the region of about 15 to 20 percent of the issue price. Such rates are most unpredictable as they have the potential to change abruptly in either direction. In the event that one decides to apply for the issue in which the retail share is 10 percent of the issue price and is likely to be oversubscribed in the region of 5 times to maybe seven times or even more. Not getting any stock, even in the lottery, might not be the best thing when the series of problems that occur in groups already leaves you with a choice. Apply for the medium term and if you are lucky enough to get any stock awarded give us a call to find out what to do if you get a good ad.

The fourth issue comes from SJS Enterprises Limited which operates the markets with its offer to sell of Rs 800 crore in a price range of Rs 531-542. The company had achieved EPS of Rs 15.69 for the fiscal year ended March 2021. Based on this EPS, the multiple of the PE is 33.84 to 34.54 times its profits as of March 21. Most of the money which is Rs 710 crore goes to the selling PE investor and around Rs 90 crore to the managing shareholder / promoter. The company is in a niche of the Indian decorative aesthetic industry, in which SJS has grown faster than the industry. The company offers products to manufacturers of 2 wheels in the form of decals and body graphics, four wheels in the form of optical plastics, dials and appliques and 2D and 3D overlays and chrome parts, as well as to home appliance industry products such as IML / IMD and aluminum badges. It is a company that manufactures niche products and has a bright future. Investors should take a measured call as there may not be a substantial listing pop.

The latest issue comes from Sigachi Industries Limited, which taps the capital markets with its new issue for 76.95 lakh shares in a price range of Rs 161-163. The show opens Monday, November 1 and ends Wednesday, November 3. EPS for the year ended March 2021 was Rs 13.13. The PE at this BPA is 12.26 to 12.41 times. The company has three factories in all, one in Hyderabad and two in Gujarat. The company is a manufacturer and exporter of MCC (microcrystalline cellulose used in various industries such as pharmaceuticals, food, cosmetics and nutraceuticals, among others. The company exports more than 60 percent of its products and the rest is sold on the domestic market. It achieved income of Rs 196 crore and after-tax profit of Rs 30.26 crore for the year ended March 2021. The problem looks interesting, but the size being so small could have a deterrent effect on the market. attribution.

The coming week consists of just three trading days. The markets will be choppy and volatile. Markets should see some recovery even if it means a dead cat rebound. You have to buy on strong declines and sell on strong rallies. There is no clear trend at the moment. Wait for clarity after Diwali and after these five issues are resolved. Advise extreme caution over the next three days.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. Opinions expressed are personal)

Disclaimer: This article was posted automatically from an agency feed without any text changes and has not been reviewed by an editor

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