Stock market may remain choppy

The period under review from Thursday (December 23) to Wednesday (December 29) saw markets continue to remain volatile. They were, however, less volatile than the previous period and saw markets stage a strong comeback. BSE Sensex gained 875.93 points or 1.52 per cent to close at 57,806.49 points while NSE Nifty gained 258.15 points or 1.50 per cent to close at 17,213.60 points. Markets were up on three of the five days and lost on the remaining two.

Wednesday's trading saw a lot of rear-guard action on the shares which were listed during the year and support on their NAV as the calendar year would end in another two days. One should use this unusual movement in such shares to book profits as there is no fundamental reason for the spurt.

During the period under review, we saw three listings. Thursday saw shares of Medplus Health Services Limited list. The company had issued shares at Rs 796. The shares closed day one at Rs 1,120.85, a gain of Rs 323.85 or 40.81 per cent. During the week, the share lost some ground and closed at Rs 1,075.95. The gain was Rs 279.95 or 35.16 per cent.

Friday saw shares of Data Patterns Limited list. The company has issued shares at Rs 585. The share closed trading at Rs754.85, a gain of Rs169.85 or 29.03 per cent. At the end of the period under review, shares had gained some further ground and closed at Rs 787.25, a gain of Rs 202.25 or 34.57 per cent.

Tuesday saw shares of Supriya Lifescience Limited. The company had issued shares at Rs 274. The discovered price was Rs 425 after which profit taking saw the share slip and close at Rs 390.35, a gain of Rs 116.35 or 31.11 per cent. Shares on Wednesday gained further and closed at Rs 463.60, a gain of Rs 189.60 or 69.19 per cent.

There was one issue which had opened on Tuesday (December 21) and closed for subscription on Thursday (December 23). The issue was an offer for sale from CMS Info Systems Limited which had tapped the markets with its issue to raise Rs 1,100 crores in a price band of Rs 205-216. The QIB portion was subscribed 2.09 times, HNI portion was subscribed 1.52 times and Retail portion was subscribed 2.26 times. There were 5.08 lac applications and on basis of lots, the Retail portion was subscribed 1.97 times.

Readers would recall that CMS had in its DRHP proposed to raise about Rs 2,000 crores. It has then reduced the size and the price and raised Rs 1,100 crores. Looking at the response to the issue, one wonders what would have happened if the company had stuck to its original size and issue price. This issue would list on the bourses on Friday (December 31). In the last two decades onedoes not recall any issue listing on the last day of the calendar year.

Fundraising during calendar year 2021 saw a sum of 1.19 lakh crores being raised, almost 80 per cent of which was through OFS. The bulk of this money was received by PE investors who sold their stake.

SEBI at its board meeting on Tuesday has made changes to fundraising. Prominent amongst these are firstly a cap of 35 per cent of fund raise on general acquisition purposes where details are not specified. Secondly the HNI category sees a new bifurcation where one third of the category would allow applications from Rs 2 lakhs plus to 10 lakhs. Thirdly there is a cap on offer for sale by promoters and PE investors holding shares in excess of 20 per cent in an IPO and is limited to half their investment and fourthly the anchor investment will see the period being increased from the present 30 days to 90 days for half the anchor book. This presupposes that all may opt for a 90-day period.

December futures would expire on Thursday (December 30). The current level of 17,213.60 points is 322.66 points away from the previous month. While Nifty has tried to pull back and done quite a bit, to now make up with one day to go seems impossible. December futures series would go to the bears.

Coming to the period under review from 30th December to 5th January, one would see markets remain choppy and volatile. Probably the FII selling witnessed in the last couple of months would be done with and the spread of Omicron would be under control hopefully. The strategy would be to book profits and use the wild swings to one's advantage with buying on sharp dips and selling on strong rallies.

Further as we come to the last article for the calendar year, wishing all readers 'Happy New Year 2022'.