Blame it on unseasonal late rains across India which hit cement demand this year. Sequential sales of cement were down -16% in October with the maximum demand damage in South India followed by the East. In terms of price fall, South India saw prices fall -4.8% while East India saw -3.2% fall. Prices in North, West and Central India were unchanged. Margins of cement companies could come under pressure due to lower realizations.

It was a sort of Black Monday on 06-December as the Nifty fell 284 points and Sensex fell by 949 points. There were a number of triggers. Firstly, the number of Omnicron cases shot up sharply over the weekend. To worsen the situation, there are worries that the RBI may turn hawkish in its monetary policy. Above all, Evergrande crisis is getting worse.

It was a day of all round and across the board selling on 06-December. The correction was rampant across sectoral indices and across large cap, mid cap and small cap indices. In terms of sectoral indices, all were in the negative with IT index falling as much as 2.7% on Monday. The critical A/D ratio stood at a deeply unfavourable 1:49 with VIX well above the 20 levels.

Foreign investors sold equities worth Rs.3,361 crore while domestic funds bought stocks worth Rs.1,702 crore. In terms of FPI sentiment it is getting risk-off and that is not good news for emerging markets like India. However, there is hope for Tuesday as Dow was up 187 bps, NASDAQ up 93 bps and European markets were all up 150 bps.

Early trades on the SGX Nifty indicate a spike of 50 bps and that could sustain for the day but there is scope for more damage to this market. With Omnicron cases on the rise, the RBI talking hawkish and Evergrande on the verge of default, the market is hardly conducive. It is best to remain in the side-lines for now.

There was good response from the qualified institutional buyers to the anchor issue of Rategain Travel Technologies on 06-December. As per the announcement made by the company to the BSE late on Monday, a total of 1,40,90,136 shares were allotted across 34 global and domestic anchor investors. The allocation was made by Rategain at the upper IPO price band of Rs.425, so the amount of anchor allocation stood at Rs.598.83 crore.

There were a total of 9 anchor investors who got allotted more than 4% of the anchor allocation. We have considered scheme wise and not entity wise. Out of the total anchor allocation of Rs.598.83 crore, the 9 key anchor investor accounted for 68%. These key anchor investors included names like Government of Singapore, Nomura India Fund, Ashoka, Nippon Flexi Cap Fund, Goldman Sachs, Pinebridge Asia, ICICI Pru Life and SBI Life.

The anchor placement is done ahead of the IPO but the price of allotment is the same as the IPO discovered price. However, unlike a pre-IPO placement, anchor investors have a much lower lock-in period of just 1 month, after which they can sell. The anchor response in the case of Rategain has been 44.83% of the total issue size. The QIB portion in the IPO will be reduced to the extent of anchor placement and only the remaining will be part of IPO.

In a way, one can say that the Rategain anchor placement was somewhat unique in that it attracted interested from FPIs and domestic funds. Normally, in anchor placements, smaller issues don’t elicit FPI interest while larger issues do not attract mutual funds. Rategain has got a good response from FPIs, sovereign funds, domestic mutual funds and insurances. In fact, Rategain allotted a total of 42.35 lakh shares to domestic mutual funds, or 30%.

It was a good close for the Anand Rathi Wealth IPO with the issue getting subscribed 9.78 times. Against the overall issue size of 84.75 lakh shares on offer in the IPO, Anand Rathi Wealth got valid bids for 829.22 lakh shares. That is equivalent to an overall subscription of 9.78times. while the QIB response was limited, the IPO got a very solid response from the HNI segment and also from retail investors.

Let me start with the QIB portion. After the anchor placement of 35.25 lakh shares, Anand Rathi Wealth had a net quota of 23.50 lakh shares for the QIBs in the IPO. Out of that, it has got bids for 58.83 lakh shares at the close of Day-3, when the IPO closed for subscription. That implies 2.50 times subscription for QIBs, which is okay but not impressive. The typical bunching of QIB applications on the last day was not visible.

This looks like a busy week for IPOs with 4 IPOs opening during the week from a broad spectrum of industries and business models. Here is a quick dekko.

1) The Rategain Travel Technologies IPO opens on Tuesday, 07-December and closes on 09-December. Rategain will look to raise Rs. 375 crore via fresh issue and Rs.960.74 crore via offer for sale (OFS). The price band for this Rs.1,335.74 crore is fixed at Rs.405 to Rs.425. The company is a SAAS-based provider of travel and leisure solutions.

2) Shriram Properties IPO opens for subscription on Wednesday, 08-December and closes on 10-December. The IPO looks to raise Rs. 250 crore as fresh issue and Rs.350 crore as OFS. The price band for the Rs.600 crore issue has been fixed at Rs.113 to Rs.118. Shriram Properties focuses on mid and affordable cost housing in South India.

3) C.E. Info Systems is better known by its popular brand, MapmyIndia. This IPO opens on 09-December and closes for subscription on 13-December. The entire IPO will comprise of an offer for sale of Rs.1,039.61 crore with price band fixed in the range of Rs.1,000 to Rs.1,033. It is a leading provider of digital maps, geospatial software and IOT services.

4) India’s leading organized shoe retailer, Metro Brands, will open its IPO on Friday, 10-December and close on 14-December. The IPO will comprise a fresh issue of Rs.295 crore and OFS of Rs.1,072.51 crore. The Rs.1,367.51 crore issue has fixed the price band between Rs.485 and Rs.500. Metro operates 598 stores across 136 cities in India.

On Monday, the SEBI disclosed that it had approved the DRHP of 2 IPOs viz. Sterlite Power and ESDS Software Solution. Both these companies had filed the draft red herring prospectus around 2-3 months back. Sterlite Power is looking at the IPO market to raise Rs.1,250 crore and is also mulling a pre-IPO placement of Rs.220 crore.

Sterlite Power plans to use the proceeds of the IPO to repay / prepay its debt. On the other hand, the ESDS IPO will entail fresh issue worth Rs.322 crore and OFS of 2.15 crore shares by existing shareholders. The company plans to use the fresh funds to buy cloud computing equipment for its many data centres as well as to repay debt.

On Monday, the 06-December, Eris Lifesciences had a solid 10% rally, despite a sharp crack in the overall indices. This rally was triggered after it announced a joint venture with Mumbai-based MJ Biopharm to foray into the insulin segment. The joint venture will be split with 70% to Eris and 30% to MJ Biopharm.

The joint venture will engage in the marketing and distribution of human and analogue insulin including Aspart, Glargine and Lispro and GLP-1. As part of the deal, MJ Biopharm will be responsible for development, manufacturing and supply. For Eris this marks the first foray into Biopharm.

Anand Rathi Wealth IPO closes for subscription on Monday 06 December. As per the BSE update at the close of Friday 03-Dec, the issue was subscribed 3.02 times overall. It had got subscriptions for 255.81 lakh shares against the 84.75 lakh shares on offer in the IPO. Typically, the QIB bids and non-institutional / HNI bids build up momentum only on the last day, as per the general trend in the IPO market.

Let me dwell on the QIB portion first. You must be aware that ahead of the IPO, Anand Rathi Wealth had done an anchor placement of 35.25 lakh shares at Rs.550 per share, which is the upper end of the price band. It had raised Rs.194 crore via anchor and reduced the QIB portion appropriately. For the balance 23.50 lakh shares left for the IPO, the QIB portion had got bids for just 3.90 lakh shares or a 17% subscription. But, it normally comes on last day.

The NII / HNI portion got applications for 53.89 lakh shares against the available HNI quota of 17.63 lakh shares, implying that the portion was subscribed 3.06 times. Here again, the funded and corporate applications come on the last day. The retail portion of the Anand Rathi Wealth IPO was subscribed 4.77 times. Out of 41.13 lakh shares on offer, bids were received for 196.37 lakh shares. The IPO closes on 06-Dec and we must await final numbers.