Street signs: Nifty faces resistance at 11,000, all eyes on Vedanta & more

Nifty faces resistance at 11,000
 

The Nifty index closed the September derivatives series with a loss of 6.5 per cent, wiping out the entire gains of the previous series. The India VIX moved up 24 per cent, indicating higher volatility. The rollover data indicates the index is light on positions and fresh build-up in coming days shall decide the further direction for the market. The markets are likely to face selling pressure on pullback moves and analysts suggest one should avoid any aggressive contra trades. The immediate support for the Nifty is placed in the range of 10,800-10,750, followed by 10,670, whereas 11,000-11,100 will act as resistance.
 

Ashley Coutinho
 

All eyes on Vedanta
 

With Hexaware’s delisting going through successfully, all eyes are on Anil Agarwal-led Vedanta. While Baring Private Equity paid nearly 67 per cent premium over the indicative price to take Hexaware private, traders are busy estimating the kind of premium Vedanta’s promoters would cough up. Some market players believe it may be between 20 and 25 per cent higher than Vedanta’s last closing price of Rs 137 per share. “Going by the filings, it appears that the promoter group has readied $3.15 billion (Rs 23,000 crore) for the delisting bid. This translates into an offer price of Rs 170 per share,” said an analyst. Vedanta is expected to launch its reserve book building process in October.
 

Samie Modak
 

Mazagon Dock hit in grey market
 

Shares of Mazagon Dock are commanding a premium of more than 60 per cent in the grey market ahead of its IPO. Sources said the shares of the defence firm are changing hands at Rs 240 in the unofficial market, against the expected issue price of Rs 145 per share. Market observers say such high premium for a state-owned company is rare. Experts said the company has strong revenue visibility and issue is priced at only 6x its FY20 earnings. Through the IPO, the Centre is divesting 15.2 per cent stake. At Rs 145 per share, Mazagon Dock is valued at Rs 2,924 crore.

Sundar Sethuraman