Asian stocks are lower today as Japanese and Hong Kong shares fall. The Nikkei 225 is off 1.39% while the Hang Seng is down 0.10%. The Shanghai Composite is trading up by 1.13%. US stocks ended sharply higher Monday, regaining roughly half of their correction-level losses amid stabilization in Treasury rates.
Back home, India share markets opened the day on a positive note. The BSE Sensex is trading higher by 128 points while the NSE Nifty is trading higher by 32 points. The BSE Mid Cap index and BSE Small Cap index both opened the day up by 0.2% & 0.4% respectively.
Barring realty stocks & bank stocks, all sectoral indices have opened the day in green with capital goods stocks and automobile stocks witnessing maximum buying interest. The rupee is trading at 64.66 to the US$.
In the news from the IPO space. The Rs 4.6 billion initial public offering (IPO) of Jodhpur-based HG Infra Engineering Ltd witnessed an overall subscription of 11% on Monday, the first day of the share sale.
Reportedly, the portion of shares reserved for institutional investors in the HG Infra IPO had seen no subscription at all, while the portions reserved for retail investors and high net-worth individuals (HNIs) were subscribed 21% and 4%, respectively.
HG Infra's shares have been priced in a band of Rs 263-270 per share. The IPO will close on 28 February.
The initial share sale of HG Infra comprises a fresh issue of shares of Rs 3 billion and an offer for sale of 6 million shares by the promoters of the company.
At the upper end of the price band, the share sale will fetch the promoters about Rs 1.6 billion. Proceeds from the fresh issue will be used for buying equipment, repayment of debt and meeting general corporate expenses.
Meanwhile, Aster DM Healthcare Ltd. listed at a discount of 4.2% at Rs 182.1 per share on the BSE Ltd. yesterday, compared to its issue price of Rs 190 apiece. The stock fell as much as 7.1% to Rs 176.5 thereafter.
The healthcare services provider's Rs 9.8-billion initial public offering was subscribed 1.3 times on the final day of bidding. The portion reserved for qualified institutional buyers was subscribed 2.1 times the number of shares on offer, while the retail investors' portion was subscribed 1.1 times. The non-institutional portion received bids for 0.6 times the number of shares allotted.
Aster DM has 323 operating facilities in nine nations, including 19 hospitals with 4,754 beds, of which 3,584 were operational as of 30 September 2017. It's building or expanding 10 hospitals to add about 727 beds.
Speaking of IPOs, the demand for IPO's had reached sky-high levels last year.
One shall note that, more than 70% of the IPOs listed in 2007 and 2008 are in the red, even today when the Sensex is at an all-time high.
A merit-based selection primarily including valuation, business, and management quality is the logical way to go about investing in IPOs. If it means going against the herd, so be it. And going by recent past, this strategy has been proven to be successful more often than not.
To know more, download this FREE report now and discover How to Get Rich with IPOs. This guide will show you how to safely profit from the IPO rush.
Moving on to the news from banking sector. In the latest development, Punjab National Bank has revealed additional unauthorised transactions related to the scam by billionaire diamantaire Nirav Modi and his uncle and business partner, Mehul Choksi, increasing the estimated size of the fraud by US$204 million (Rs 13.22 billion).
This increase means that the total fraud now amounts to nearly US$2 billion (Rs 126.2 billion) as against the original estimated US$1,772 million (over Rs 113 billion).
Notably, the value of the additional unauthorised transactions is almost equal to PNB's entire net income of Rs 13.2 billion for fiscal year 2017.
The fresh letters of undertaking (LoUs) were understood to have been discovered after being reported by overseas bank branches, which checked their portfolio in light of the recent fraud.
In addition to the LoUs, PNB is understood to have a line of credit of close to Rs 10 billion to the Mehul Choksi/Nirav Modi groups. The total exposure of the banking sector is expected to be well in excess of Rs 200 billion.
Speaking of scandals, here's a look at the kind of price correction we have seen in the stocks of these three companies - all of them making headlines for the wrong reasons! It's quite a fall from their 52-week highs.
Scandals Have Hit This Terrible Trio Hard
PNB share price opened the day down by 6.3%.
This article was originally published in English at www.equitymaster.com
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