Street signs: MTAR Tech GMP at 25%, RailTel on investor radar, and more

Will Nifty hold 14,000?

The market saw wild swings during the February series. The Nifty index gained as much as 9 per cent after the Budget and the Bank Nifty rallied 20 per cent, before giving up the bulk of the gains last week. Friday's fall resulted in a “lower top-lower bottom” formation, which experts say signals a trend reversal. They say the correction may extend towards 14,200-14,000 levels, and a breach of the 14,000 trend line support may further lead to a fall towards 13,700-13,500 zones. The index is expected to face resistance at 14,750-14,920 levels. "Momentum traders should avoid aggressive or leveraged longs for a while and use decent declines to accumulate quality propositions with a broader view," said Sameet Chavan, chief analyst-technical and derivatives, Angel Broking.

Ashley Coutinho

MTAR Tech GMP at 25%

Shares of MTAR Technologies are commanding a grey market premium (GMP) of 25 per cent ahead of its IPO. The company’s IPO opens on Wednesday. The IPO price band is Rs 574-575 per share, valuing the company at about Rs 1,770 crore. “The GMP has come off from 35 per cent following Friday’s sharp sell-off. Given the good performance of recent IPOs, the enthusiasm continues to be high among investors,” said a broker. MTAR is an engineering firm catering for the nuclear, space and defence sectors. As of December, it had an order book of Rs 336 crore, of which Rs  160 crore was from the space and defence sectors and Rs 93 crore from the nuclear sector.

Sundar Sethuraman

RailTel on institutional investor radar

Shares of RaiTel Corporation closed with a gain of 28 per cent of their IPO price on Friday, even as the benchmark indices corrected nearly 4 per cent. Grey market activity indicated that the stock would list with a gain of 10-15 per cent. As a result, the listing gain surprised the Street. It appears that the jump in stock price was underpinned by aggressive buying by institutional investors. The bulk deal data showed Goldman Sachs bought 3.7 million shares, while Nippon Mutual Fund bought 7 million shares of the state-owned company. The combined buying by these two amounted to a 3.34 per cent stake. At Friday’s close, RailTel’s market cap stood at Rs 3,896 crore. The stock trades at 26x its FY20 earnings. 

Samie Modak