Now stock market returning on the path of improvement

Foreign Institutional Investors i.e. FIIs, who have been selling the Indian stock for a long time, now feel that due to the strong condition of the Indian economy and its impact, a rise in the stock markets is beginning. This may be because last week FIIs left the path of selling and started buying and FIIs leaving the selling path is enough proof that the Indian stock market is on a bullish path in the coming times. It cannot be assumed that there has been a sudden change in the attitude of FIIs. It is entirely possible that the reason behind this change has been the recent assessment of the future of the Indian stock market by 2024 by some funds, who are considered giants among FII. Many leading fund operators estimate that 2024 could also be the golden period of the Indian stock market and the BSE index may touch record heights of 85000 and NSE Nifty 25000. The faith of domestic investors towards the Indian stock market is extremely firm. The proof of this is that the 5 IPOs that came on the main board last week received record applications and against the demand of Rs 7380 crore from the companies, Rs 2.60 lakh crore were offered by investors.

I had also discussed the attraction of investors towards the IPO of Tata Technologies, which opened last week and had expressed the hope that this IPO of Tata Group, which entered the capital market after 20 years, may get fully subscribed on the first day. But investors did not wait even for a whole day for this and subscribed the entire IPO in just an hour. Talking about the figures, more than 73.60 lakh investors have applied in the IPO of Tata Technologies, which is a record so far in the IPO market.

Earlier, 73.40 lakh applications had come in the IPO of LIC, opened on May 4, 2022, and even before that, 48 lakh investors had applied in the IPO of Reliance Power. A large number of applications can be said to be a measure of the credibility of the companies, but one should also pray to God that the listing of Tata Technologies should also be in accordance with the prices prevailing in the gray market and later the company’s prices would remain at these prices. Because some of the past experiences of those who have hit the IPO market to raise thousands of crores of rupees have not been good for investors. The example being that of LIC which allotted shares to investors in the IPO in May 2022 at a price of Rs 949, but its closing market price on Friday, LIC is Rs 677.65, i.e. about 40% less than the IPO price. Now if the interest on the amount invested in it is also calculated, this loss goes up to about 50%.

Talking about the last week, the market has been showing an improving trend for the fourth consecutive week in the week ending 24th November. According to the data, last week the BSE index increased by 175.31 points i.e. 0.26% and the BSE index increased from 65794.73 points to close at 65970.04 points, while the NSE index improved by 62.90 points i.e. 0.31% and the NSE Nifty index improved from 19731.80 points and closed at 19794.70 points. Regarding the market trend this week, traders say that due to holidays and monthly cut of the futures market, there will be only three working days this week. After this, exit polls for the assembly elections to be held in five states will also begin. If the index declines due to any reason then the market will further recover. They say that at present Reliance Industries, BHEL, HPCL, BPCL, Kalamandir, Railtel, SJVN, Selen Expo, Sabros, Indigo, McDowall, Yash Bank etc. can be considered as safe investments. No new IPO will be available for investors in the main board. Similarly, five IPOs will be available for investors to apply for on the SME platform this week. Talking about new IPO applications coming to SEBI, this week a company Gopal Snakes Limited has presented its new draft Herring Prospectus-DRHP

This is the personal opinion of the author. The author, his family members and acquaintances may have investments in the companies mentioned in the article.

Vimal Kothari Associate Editor First India News & Senior Journalist