Money Tree

The week was full of volatility. Our markets made wild swings both sides and are still to take a direction. In these kind of markets it becomes very difficult to make money, you need to take immediate calls and book profits at very short intervals. Stop losses are trigerred very soon, trend reversals are witnessed more frequently, making it very difficult for the investors to take decisive call. We made some recommendations during last ten days and we are summarising hereunder how these have fared.

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The year 2007 is not good for new issues. Most of the IPOs of 2007 are trading much below their issue prices. We have compiled some data on the recent IPOs issued in the first quarter of 2007 hereunder to give you an overview of the performance of these IPOs. As per the closing prices of 16th March 2007 only 9 out of the 28 IPOs listed below are in profits and among these only Idea, Mindtree, Redington, Global Broadcast, Pyramid saimira and Tanla Solutions have given good profits. If you look at the subscription figures given hereunder, these are the IPOs which were highly oversubscribed and the worst performing IPOs are the ones which received just sufficient applications to fully subscribe the issue and all the applicants got a firm allotment. Vijeswari, Indus Fila, Cairn, etc. fall in this category. However, we do not mean that figures of oversubscription are any indication to the listing price, but it tells you the demand and supply situation and the stocks which have high demand are bound to move up as those who did not get any allotment would try to grab their picks on listing.

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Page Industries has been listed today at Rs. 329 as against its issue price of Rs. 360 and currently the stock is quoting at Rs. 305 almost 15 percent down from its issue price. The stock touched a high of Rs 339 and a low of Rs. 270 early in the morning.

Raj TV has been listed at Rs. 225 and currently it is quoting at Rs. 218. The shares were issued at a price of Rs. 257 per share and currently the stock is almost 14 percent down from its issue price.

Yesterday our markets shed all the gains of the morning which was not expected whereas the asian markets closed well in the green. Our markets performed against the global trend yesterday which is a negative sign. The global markets are almost flat today, with no significant cues for our markets. We expect that the yesterday’s trend will continue to close the week and the markets should remain in a negative territory today. It seems that our markets are slated to correct to still lower levels from here.

Orbit Corporation Ltd is an ISO 9001:2000 certified real estate construction and development company. The company is coming out with a unique first of its kind instrument. The allottees of equity shares will be issued convertible warrants excercisable after 18 months of the allotment.
This is an innovative instrument good for the company as well as investors. The company will keep getting money from 18th to 30th month of issue to keep its projects going and investors will get the new shares at a discount of 30 percent in case the market price is below its issue price at the time of conversion and at a discount of 10 percent if the market price of the stock is above its issue price.

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Gremach Infra has extended the closing date of its IPO to 19th March and has revised its price band to Rs. 72 - Rs. 86. The total issue size was of 8194445 equity shares and bids have been received for only 2632980 equity shares constituting 0.32% of the total issue. The issue is not even fully subscribed till now and therefore the company had to revise the price band.

The ICRA IPO is scheduled to open on 20th March 2007. Brief details are provided hereunder.

Issue Opens On : March 20,2007
Issue Closes On : March 23, 2007
Issue Size : 25,81,100 Equity Shares
Issue Type : Book Building
Face Value : Rs. 10/-
Price Range : Rs.275/- to Rs.330/-
Tick Size : Re.1/-
Market Lot : 20
Minimum Order Qty : 20
Listing Stock Exchange : NSE, BSE
Maximum Subscription Amount for Retail Investor : Rs.100000/-

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Yesterday the US markets recovered and the Asia has also opened in the green today. We expect a strong rebound in the morning with a gap up opening. Remain long for the day and try to close your positions by the end of the session as markets have again looking direction less. Real Estate sector is looking strong.

The US markets have closed deep in the red on account of week data and appreciation of Yen against dollor. The Asian Markets are all down from 2 to 3.5 percent, and we expect our opening no different from that, we should open about 100 points down on NIFTY and 300-400 points down on Sensex.

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