After the rally last week, will markets scale new highs?

Markets in the week passed by have been risky and uneven. On a couple of event throughout the week one noticed opening losses being worn out and equally income too being worn out.

At the finish of the week, we noticed markets gaining on 4 of the 5 buying and selling classes and shedding on one. BSE Sensex gained 831.15 factors or 1.16 per cent to shut at 72,426.64 factors whereas Nifty gained 258.20 factors or 1.19 per cent to shut at 22,040.70 factors.

The broader markets noticed BSE 100, BSE 200 and BSE 500 acquire 1.26 per cent, 1.23 per cent and 1.08 per cent respectively. BSE Midcap gained 0.91 per cent whereas BSE Smallcap was up 0.02 per cent. The prime sectoral gainer was BSE Auto which outperformed the broad markets and was up nearly 5 per cent.

The Indian Rupee gained 2 paisa or 0.02 per cent to shut at Rs 83.02. Dow Jones was uneven and gained on three of the 5 buying and selling classes, shedding on two. At the finish of the risky week, Dow was marginally adverse, shedding 43.70 factors or 0.11 per cent to shut at 38,627.99 factors.

The week passed by was stuffed with listings and we had as many as 5 listings throughout the week. The first was from Apeejay Surrendra Park Hotels Limited which had issued shares at Rs 155. Shares of the firm listed on Monday, February 12, and closed day one at Rs 203.45, a acquire of Rs 48.45 or 31.25 per cent. By Friday, the shares misplaced some floor and closed at Rs 194.70, a acquire of Rs 39.70 or 25.61 per cent.

Wednesday the 14th of February noticed three listings they usually have been definitely not the finest that one has seen in a really very long time. The first was from RP Tech Limited which had issued shares at Rs 311. The found worth was Rs 335, a acquire of Rs 24 or 7.71 per cent. At the finish of the day, the share closed considerably decrease at ranges of Rs 320.10, a acquire of Rs 9.10 or 2.92 per cent. By the finish of the week, the share gained considerably and closed at Rs 345.65, a acquire of Rs 34.65 or 11.14 per cent.

The second of Wednesday’s listings was from Capital Small Finance Bank Limited which had issued shares at Rs 468. The found worth was Rs 435, a lack of Rs 33 or 7.05 per cent. The share slipped additional throughout the day and made a low of Rs 421.10. It recovered from right here to shut round the open at Rs 436.05, a lack of Rs 31.95 or 6.82 per cent. At the finish of the week, the share regained some floor and closed at Rs 449.25, a lack of Rs 18.75 or 4.01 per cent.

The third of Wednesday’s listings was from Jana Small Finance Bank Limited which had issued shares at Rs 414. The itemizing worth was Rs 396, a lack of Rs 18 or 4.34 per cent. The share misplaced sharply as the day progressed and made a low of Rs 365. The share closed marginally greater than the low at Rs 366.80, a lack of Rs 47.20 or 11.40 per cent. During the remaining two days of the week the share regained misplaced floor and closed at Rs 419.5, a acquire of Rs 5.05 or 1.22 per cent.

The fifth and closing itemizing of the week was from Entero Healthcare companies Limited which had issued shares at Rs 1,258. The found worth was Rs 1,245, a lack of Rs 13 or simply about 1 per cent. The share closed day one at Rs 1,149.50, a lack of Rs 108.50 or 8.62 per cent.

These 4 listings present one factor clearly that major markets are overheated and the valuations that are being requested for are unrealistic usually. There isn’t any consolation in the valuations and one dangerous day at the bourses can knock the firm off its pedestal. Time for promoters and service provider bankers to drag up their socks and make sure that they and their purchasers don’t grow to be grasping or it might grow to be a case of the hen that lays the golden egg being slaughtered.

There is one IPO from Juniper Hotels Limited which is tapping the capital markets. The subject consists of a contemporary subject of Rs 1,800 crore in a worth band of Rs 342-360. The subject would open on Wednesday (February 21), and shut on Friday (February 23).

The firm is the solely lodge developer which has a 50:50 three way partnership or partnership with a number one international lodge operator and is the solely one among its form in India. Further, there isn’t any funding made by any international lodge operator in a lodge firm in India.

The subject has 75 per cent reservation for QIBs, 15 per cent for HNIs and 10 per cent for retail as the firm has not reported income over the last three years. In phrases of revenues, the firm reported revenues of Rs 717.3 crore for the 12 months ended March 23 and EBITDA of Rs 327.4 crore. EBITDA margin was at 45 per cent. The firm has earned a adverse EPS of Rs 13.88 in FY21, Rs 13.08 in FY22 and a much-improved adverse Rs 0.10 for the 12 months ended March 23.

The objects of the subject are to repay Rs 1,500 crore in the direction of the firm’s debt. This would result in a revenue in the subsequent monetary 12 months merely due to curiosity prices on the retired debt being saved. The firm is presently paying about 11 per cent on its debt. Post this cost, one would anticipate the debt score of the firm to additionally enhance which might result in financial savings and therefore greater income.

The firm is similar to its friends which embrace the Chalet Hotels, Indian Hotels, Lemon Tree and East India Hotels. Juniper Hotels is an asset heavy firm and owns all the motels that are presently managed by Hyatt. It would proceed this mannequin and stay an asset-owned lodge firm.

The firm is in the midst of increasing its lodge, Grand Hyatt at Kalina, Mumbai, which might grow to be the largest lodge in the nation publish the growth. At current, the firm has 1,836 keys in seven working motels, has a MICE space of 1.27 lakh sq. ft. and industrial house of 1.44 lakh sq. ft.

Juniper Hotels deserves subscription taking a look at the alternative that exists and the single largest advantages of turning into nearly a debt free firm publish IPO and which has had a worldwide lodge operator as its equal accomplice for 25 years.

Coming to the markets in the week forward, anticipate markets to stay uneven and risky. What has occurred in the week passed by is the proven fact that markets have weathered the storm and have made a setup from the place the all-time excessive may be challenged. Whether they will be crossed or not is one other query.

The setup has grow to be constructive and there are potentialities that if the momentum continues, they may very well be crossed. As is predicted in markets when a new excessive is made, markets grow to be much more risky and uneven. Already markets are in a uneven situation and with potentialities of new highs they might be choppier and much more risky. Time subsequently to grow to be cautious. Trade with cease losses and chorus from taking giant positions.

The technique for the week could be to maintain one eye on the indices — Sensex, Nifty — and the different on traded volumes. At round new highs, volumes have a tendency to extend sharply. The course or development of markets offers a sign of the place they’re then headed. Use sharp rallies to promote into the market what you personal and chorus from shorting the markets. At the similar time use solely sharp dips to purchase and that too from the giant cap house solely.

Trade cautiously.

(Arun Kejriwal is the founding father of Kejriwal Research and Investment Services. The views expressed are private)

(IANS)